1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Making the Best of New Energy Resources in the United States

Since around 2007, the country has been enjoying an “energy renaissance” thanks to its abundant stocks of shale oil and gas. The resurgence in oil and gas production is beginning to create discernible economic impacts and has changed the landscape for natural gas prices in the United States, boosting competitiveness. In order to reap the benefits fully, significant investment is needed. Federal and state governments capture some of the resource rents, but there are potential opportunities to increase taxation and use the revenues to support future well-being. Taxing natural resource rents with profit taxes can be less distortionary than other forms of taxation, though only one state uses this form of tax. Production of shale resources, like other forms of resource extraction, poses a number of challenges for the environment. Respecting demands on water resources requires adequate water rights are in place while state and federal regulators need to monitor the environmental impact of hydraulic fracturing closely and strengthen regulations as needed. Natural gas is a potential “bridge fuel” towards a lower carbon economy, helping to reduce emissions by leading to a substitution away from coal. Flanking measures are desirable to counter natural gas hindering renewables and low prices stymieing innovation. This Working Paper relates to the 2014 OECD Economic Survey of United States (www.oecd.org/eco/surveys/United States).

English

Keywords: energy, resource taxation, resource booms, air and water pollution, government policy, hydrocarbon resources
JEL: Q4: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; H25: Public Economics / Taxation, Subsidies, and Revenue / Business Taxes and Subsidies including sales and value-added (VAT); Q33: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Nonrenewable Resources and Conservation / Resource Booms; Q53: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
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