New Estimates of the Value of Federal Mineral Rights and Land

Abstract

We calculate a time series of the value of federal mineral rights in oil and natural gas by using various estimates of proven and unproven reserves and time series on federal government royalties and bonus payments. We also present estimates of the components of the revaluation of this series through time.The results are striking. Federal mineral rights are the single largest item in a complete balance sheet of the federal government, dominating the total value of tangible capital or financial assets. In 1981, for example, we estimate that the value of federal oil and gas rights exceeded $800 billion, which was larger than the privately held national debt. The paper also presents estimates of various confidence bounds on the value of oil and natural gas. The methodology can be extended to other minerals, although we have not done so; our estimate is a lower bound on the total value of all mineral rights.The paper also expands and extends previous estimates of the value of federal land. New data, and attention to the detailed decomposition of federal land holdings by type, lead to substantially larger estimates of the value of federal land than have been presented in previous research. Our estimate is that by 1981, the total value of federal land was$175 billion.