By Steve Forbes
In terms of sustainable and abundant energy supplies, the United States has a huge and completely underestimated advantage over other countries. Here, individuals and companies are allowed to own mineral rights.
In other countries, people can own land, but the government owns and has a stranglehold on whatever minerals and natural resources, such as oil, gas, coal, copper, gold, silver, etc., lie beneath the earth’s surface. If someone discovers oil in their backyard, they’re out of luck – as it belongs to the government. This has profound implications that are often overlooked.
Private ownership of mineral wealth in the US provides individuals and private companies with a strong incentive to conduct exploration. As they can benefit from the discovery, development and extraction of these natural resources. This adds value to surveys.
The US has large oil and gas companies, but at the same time it also has a huge and “vibrant” mining industry. These private individuals are often more active and nimble than their colossal “counterparts”. In some areas of the country, where the geological formations are favorable, private landowners are free to survey the subsoil of their lands – or sell their lease rights to third parties. In this case, if, say, oil is found, the owner will have rights to it.
These private rights lead to much more research. The geology of the southwestern states of the USA is not significantly different from that of the lands located across the border with Mexico, but the exploration for oil and natural gas in this part of the country is much more than that carried out in our neighboring country.
Why; Because the oil industry in Mexico is owned by the government. There is no comparable mining potential in the country to that offered by the US.
This unique American approach to mineral rights has also sparked an innovative business environment. While governments in other countries have imposed strict controls on how mineral wealth is mined and exploited, companies in the US can try new ways of mining.
This freedom to experiment led to the groundbreaking discoveries of lateral drilling and hydraulic fracturing, a practice known as fracking, that sent US hydrocarbon production soaring. Natural gas, a clean fuel once thought to be running out in the US, has become abundant. This led to the country’s energy independence, which is now in jeopardy due to the antipathy to fossil fuels shown by the Biden administration.
Despite the US experience, Mexico’s government-controlled approach dominates the rest of the world. For example, there are vast quantities of natural gas waiting to be discovered and developed in Britain, Europe and elsewhere. But the absence of private ownership and control of mineral wealth by American standards is a costly obstacle.
Source: Capital
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