total fossil fuel resources owned by the Federal government are valued at over $150 trillion alone.
My guess is that land is the largest real asset of the government. So there is a case for saying that even with all the unfunded liabilities that the government has accrued, the government is not broke.
I think that the best argument against those of us who say that the U.S. will have to inflate away its debt at some point is the argument that the government could sell assets if it wanted to.
Riffing off the earlier post: What is the likelihood of the government, constrained by political realities that exist in this country, being able to sell off the National Forests, BLM land, and other assets that it currently owns?
I doubt that National forests would be on the block but it auctions off BLM land all the time. If the sale brings big money, like it did in 2007 in Las Vegas, who gets it is usually a fight.
“What is the likelihood of the government, constrained by political realities that exist in this country, being able to sell off the National Forests, BLM land, and other assets that it currently owns?”
Overall? Low. But as an alternative to defaulting on government debt should it come to that? Much higher. A few years ago you might have asked — what are the changes that Detroit Institute of Arts would sell any of its masterpieces? The answers would have been similar.
Apparently, no need to sell off the national forests, BLM, etc. Just transfer the mineral/oil rights to the bond holder with strong contractual rights to exploit those separate from the federal lease system, i.e., transfer them into the private oil lease sector.
Not to mention >$350 billion in unneeded gold reserves.
Unfortunately about 2/3 of that $150 trillion comes from the Green River oil shales which are actually worth about 0. Note that this is the huge Rocky Mountain resource of kerogen as distinguished from the tight oil formations in North Dakota and Texas which are very valuable. And to make it worse, for all the oil and gas reserves, the barrels in the ground are being valued at commodity exchange prices.
It’s probably not much of a surprise that a barrel of oil in the ground is valued less than a barrel of oil pledged for delivery in two weeks, but the difference may be quite surprising. If you look at actual market transactions of acreage, single digit dollar valuations of proved reserves are common. So instead of valuing reserves at $100/barrel, maybe one tenth of that is fair. There’s a similar overestimate of the natural gas value.
So yeah, out of that $150 trillion, my more realistic assessment of the value for the US government is more like $5 trillion give or take 50%. Not chump change at all, but a very different story.
Yep… Love the wordsmithing… “worth to the economy of over $150 trillion”… That can mean anything and everything….
Let’s zoom in: “These resources could be leased under the right government policies to earn the state and national government royalties, rents, and bonus payments that CBO conservatively estimates could total almost $150 billion over 10 years for the oil and gas leases alone”.
– This is $15bn per year in a depleting asset. Maybe worth $150bn in net present value, but probably overstated.
the valuation or energy resources quoted above is meaningless. For example: For oil, It is taking the technically recoverable oil resource estimate and multiplying it by price (assuming to be $100).
that would be gross revenue if developed – not net revenue. Some of the resource cannot be developed for less than $100. Therefore the value is 0. or negative if actually developed.
There is also no consideration of the time value of money. To develop all of these resources would take a lot of time.
Yes, Federal lands and waters contain a lot or resource and is worth an awful lot.. But statements like above do not add much value to the discussion.