Oil and Gas Leasing: A Study in Pseudo-Socialism
GroundSwell, May-June 2009]
I. WHAT IS SOCIALISM
Socialism, in common usage, is a Protean word, slippery and shifting.
Many use it without defining it, whether from innocence, negligence,
or cunning. These many include many economists: semantic care is weak
in the traditions of the profession. "Rigorous"
model-builders today are among the offenders: the premium is on
gilding the lily, neglecting the roots. Indeed, roots are not even
needed for models that float in outer space, vouching for and
communing mainly with each other.
Those who do define Socialism, explicitly or implicitly, use the word
for different things. A major difference, treated here, is between
Managerial Socialism (who decides) and Distributive Socialism (who
gets). These may overlap, but are independent of each other and often
conflict. For example, Riverside, CA, owns its own electric utility
(on whose Board I once sat, fighting for a little justice and
efficiency against lobbyists and dupes). This is Managerial Socialism,
municipal style. Its traditional rate structure includes large
elements of cross-subsidy, mainly taking from the lower middles for
the rich, tempered by crumbs thrown to the very poor. The same is true
of our water system, and of most municipally owned and managed
utilities around the nation. Water and sewer service are common
examples of Managerial Socialism (from which the mnemonic "sewer
socialism"). They have little in common with Distributive
Socialism, except when their rates are held down by taxing benefited
lands, common in dynamic cities of the Progressive Era.
At higher levels of government, also, Managerial Socialism may play
reverse Robin Hood. In British Columbia the "Socred"
(right-wing) party in the 1960s socialized the ferry service, the
provincial railroad, and the electric utility (now B.C. Hydro), using
them in schemes to enrich land speculators. To boost along B.C. Hydro
they raided the teachers' pension fund, borrowing from it at rates
near zero. The New Democratic Party (NDP) (left-wing), taking power in
1972, ended the raid on teachers, but not the cross-subsidy. In
California, the State?s Department of Water Resources (DWR) designed,
built, and operates the California Water Plan (CWP) for the primary
gain of a handful of giant landowners on the west side of the San
Joaquin Valley. They, too, raided education, taking certain State oil
revenues (known as the COPHE fund) previously earmarked for The
University of California. Such examples could, of course, be extended
Another form of Managerial Socialism is direct administration of
public lands. Our National Forests are an example. The track record is
not good. The Forest Service manages a national asset worth several
$100 billions, from which it generates no positive cash flow. Latent
surpluses die a-borning. At one time this was from an excess of
ideological commitment to slow cutting cycles and "community
stability," as exemplified by Congressman James Weaver's
dedication to Roseburg, OR. More recently it is from internalizing
profits and plowing them into roading submarginal forests for
uneconomical cutting. Libertarians and allied (James) Buchananites
blame this on their universal demon,
the bureaucrat, expanding her empire. They have dressed up
this view, which is pretty much Rush Limbaugh in drag, as a new discipline,
called public choice, now crowding more useful knowledge out
of overpriced textbooks forced on the captive market of college
students. Self-preserving bureaucrats are a factor; but hiding up
above and pulling their strings are landowners in marginal counties
containing federal forest lands. These pull for ill-advised cutting
because they get a piece of the revenue to lower their local property
taxes. Buchanan and public choice disciples are silent on this, the
key factor. Either way the Forest Service soaks in revenues from the
Federal Treasury, yielding nothing back. Even if one likes the model,
it could not be universalized.
More commonly, public landlords lease lands to private firms,
limiting their managerial input to dirigisme expressed in regulations
and guidelines. The Bureau of Land Management (BLM) thus administers
its vast empire, which includes the Outer-Continental Shelf (OCS), as
mainly a passive landlord. Its main task is just collecting rents. To
the extent The Bureau does a good job, or Congress lets it do a good
job, this evinces more of Distributive than Managerial Socialism. To
the extent it does a bad job it is "Pseudo-Socialism," to be
Distributive Socialism, in contrast to Managerial, means tapping
surpluses in the private sector and using them for the public good.
The revenues may provide public services that are available to all,
like schooling and social security; or be used to abate regressive
taxes; or be used to finance social dividends paid in cash, as in
Alaska. Revenues may also be used to finance public works, even though
these benefit only a few specific landowners. This becomes
Distributive Socialism when the enhanced land rents are tapped to
recoup more than the allocated expenditure. (If only expenditures are
recouped, it is more like a contract between the state and the
Interjurisdictional transfers are not properly "Socialism,"
but a reshuffling of rents among landowners. These transfers are
called "horizontal balancing" in the lingo of fiscal
federalism. They are a long step removed from the social dividend paid
to individuals as such. They are properly decried for "taxing
poor people in rich places to help rich people in poor places."
These "poor places" include developmental regions and local
districts, poor today but prospectively rich, where landholdings are
large and speculative. Horizontal balancing devices thus fall in a
class of artful dodges, seductions, and diversions leading from
Distributive Socialism to Pseudo-Socialism.
Distributive Socialism also means administering public lands
pro-actively, affirmatively, to maximize revenue, in the manner of
private landlords. Not to do so is to let private lessees keep and
privatize the surpluses generated by resources in the public domain.
The NDP in B.C. earned its Socialist stripes by raising rents on Crown
lands owned by the Province ("The Crown Provincial," in
Canadian terms). The Minister of Lands did this directly by
renegotiating timber and other leases, on a site-specific basis. He
could have huffed and bluffed less, and accomplished more, but he did
seem to have the basic concept.
The NDP Administration tried to socialize the surpluses in gas
extraction by joining Managerial and Distributive Socialism in the
B.C. Gas export monopoly, a Crown Corporation. It was to levy a tax in
the form of a monopoly profit on gas transmission and export. Here
they stumbled by failing to recognize the differential, site-specific
nature of rent. They made it too easy, thinking it was just a matter
of buying low and selling high, across the board. They set a uniform
field price. It was, naturally, too low not to stifle high-cost
producers, and yet too high to tap most of the rent taken by low-cost
producers. They failed to rifle in on the source of the surplus.
Thus, to define Distributive Socialism we need to define "surpluses."
These are primarily rents from lands and resources given by nature. In
an open tax jurisdiction, labor and capital are mobile and their
supply is elastic; only land is fixed. Land rent is the basic taxable
surplus. Where there is no land rent, an attempt to levy any tax can
only abort extraction and land use, rather than collect the tax. Where
is there no land rent? First, there is no rent generated on "marginal"
land that is just barely worth using at all. Second, and more
generally, there is no rent generated by marginal increments of labor
and capital applied on any land, from the best to the worst.
Otherwise, all production on land generates some rent, which is a
The statement above expresses "The Physiocratic Doctrine"
of tax incidence, harking back to Francois Quesnay, and even earlier
writers like John Locke and Jacob Vanderlint and perhaps Richard
Cantillon. The Doctrine has staying power: it is used, for example, by
Bogart, Bradford, and Williams writing in the National Tax Journal,
December, 1992, on tax incidence in New Jersey.
Capital, unlike land, migrates among taxing jurisdictions. The return
to reproducible, depreciable capital is not, therefore, generally a
surplus. Capital differs from land. Capital has to be attracted, and,
if domestically generated, dissuaded from emigrating. It is true that
in the short run existing capital, if affixed to land, cannot be
exported. Its returns thereby become a temporary taxable surplus --
hence the name "quasi-rent." Capital can still be dissaved,
however, through neglect of maintenance, and will not be replaced. The
demonstration effect of disappointing old investors' earlier
expectations will have a high cost in repelling future investing by
them and others. Old buildings, unmaintained, will shed blight on
their surroundings. Non-replacement, in a dynamic world, guarantees
early obsolescence. Capital finds many subtle ways of emigrating, or
being disinvested and consumed. Its yields are not really a taxable
surplus when we factor in the consequences of trying to tax them:
withering away of the community.
The Physiocratic rule, which may seem novel and subtle in tax
discourse, stands out nakedly whenever landowners, public or private,
negotiate leases. If a lessee is required to pay a share of his gross
sales (a royalty), he compensates by offering that much less on the "bid
variable," (often a "bonus" paid up front). Lessors and
lessees understand this well: it is central to all their negotiations.
Whatever the twists and turns, the rule of compensation applies: take
more here, get less there. The lessee is to supply labor and capital
at full cost; acquiring use of land will yield him a surplus above
costs. That surplus is all he can and will pay for. The maximum of
economic surplus is the rent of land in its highest and best legal
Distributive Socialism, then, means tapping land and resource rents
for the public. On the public domain, acknowledged to be public
property, the institutional basis of Distributive Socialism is fully
in place. We need only apply a good leasing system, keeping rent
payments up to current values. On fee simple lands, Distributive
Socialism means and requires modifying tax systems to rifle in on
Rifling in is essential. Recall, the Physiocratic rule of
compensation says all taxes are shifted to rents anyway; some take
that to mean any tax will do. However, "broad-based" taxes
like VAT or a general sales tax sterilize lands that would be just
marginal before tax. They also abort all marginal and near-marginal
activity on all lands, for marginal inputs (where marginal cost equals
price) generate no rent. That in turn forces rates to be kept low, to
avoid destroying half the economy. Such taxes socialize all the rent
from lands that are now made marginal after-tax, but leave most rent
untapped on the most rentable lands and resources. Taxes that rifle in
on rent, on the other hand, inherently exempt marginal activity. They
may be set at very high rates, tapping more of the taxable surplus, or
Analogously, recall the case of the B.C. Gas Corporation cited
earlier. This is a public agency set up to extract rents from gas
resources by monopolizing export, buying low and selling high. Its
fatal initial error was to set a uniform field price. This price must
remain fairly high to avoid stifling the high-cost (marginal)
producers. As a result the price is high above that needed for the
low-cost producers, leaving them enjoying the rent of the resource.
Let's look at a simple numerical example, to make the point. Say the
uniform field price is set at $1/mcf, while costs of extraction range
from 20 cents to $2 per mcf. All producers with costs over $1 are
wiped out; all those with costs under $1 are left taking a surplus per
unit of $1 less their respective costs. The example is useful to
understand how taxes work, too. The B.C. monopoly cut is just like a
tax levied on each unit of extraction.
Whether on public domain or fee simple lands, Distributive Socialism
has three compelling attractions. One is, it requires no Managerial
Socialism; it may work through the free market. It does not preclude
elements of Managerial Socialism, where these are otherwise desirable;
it simply does not require them.
The second attraction is that it lets taxes be progressive without
impairing incentives. Taxes that rifle in on rents are progressive and
distributively socialistic because the ownership and control of
rent-bearing lands is highly concentrated in a few hands. If you
wonder who?s in charge here, just start something.
The third attraction is that taxes on rent may be heavy without
impairing incentives, precisely because rent is a surplus. The
land-tax component of the existing property tax is a good model. With
this tax, there is no "taxable event" required. Taxes are
simply due periodically, based on an external assessment of the land's
market value, which in turn derives from rent of its highest and best
Most political leaders live and orate in a world of dismal choices
and trade-offs. To them, there is no cutting the deficits, either
state or federal. We must cut taxes or lose jobs. We must make taxes
regressive or destroy useful incentives. On the other hand, once we
define, identify, and rifle in on rent as taxable surplus, those hard
choices vanish. We can have higher taxes and more jobs, both at once.
We can tax progressively while simultaneously enhancing
incentives to produce and save.
Likewise, on lands still in the public domain, we can rifle in on
rent by framing and administering a good leasing policy. Leasing does
have some transaction costs, but the private market does it anyway.
There is a reasonable, if less than perfect, track record. Ground
leases are common in downtown real estate, nationwide, even under
imposing structures like the Empire State Building, and Rockefeller
Center. The Irvine Company, holding 20% of Orange County, California,
has long declined to sell land, but only lets it for intermediate
terms. Much of Hawaii is developed on the same terms. Most oil and gas
is developed by lessees on private land, yielding large rents to the
Why cannot the U.S. Government as lessor do what private lessors do,
extracting the surplus for the owner? Here we meet the obstacle
of Pseudo-Socialism, to which we turn.
II. WHAT IS PSEUDO-SOCIALISM?
Pseudo-Socialism is what happens when resources in the public domain
are leased below a market rental, giving away part of the public
interest. That has the effect of installing the lessee as though she
were the owner. The BLM, leasing grazing privileges on Federal lands
in the west, has fallen into this pattern conspicuously and
notoriously, subject to pressure from western Senators who have the
power of many votes in the U.S. Senate relative to their state
populations. As the late Senator Albert Beveridge of Indiana said a
century ago, a major problem in Washington is not so much the free
coinage of silver, as of western senators. The dollar values in
grazing are small, but the object lesson is visible, depressing, and
Some other bad examples are school section lands in the middle
states. These originated as Federal land grants intended to
support local schools. Some of them are corruptly let to insiders in "sweetheart
deals" for token rents. Another bad example is the County of Los
Angeles, which owns lands in the Marina del Rey district. One parcel
lay idle for 25 years in the control of a politically well-connected
developer who finally went bankrupt and walked away from it, leaving
unpaid even the token rent charged. A third bad example is ironic:
Fairhope, AL, founded and chartered specifically as a "single-tax
colony," to exemplify the principles of Henry George. The
Fairhope Corporation owns the land and collects the ground rent for
public purposes. However, when a new generation arose "that knew
not Joseph" it proved politically impossible to keep colony
ground rents up to market. The same happened in Canberra, its original
financing carefully planned by transplanted Chicago Georgist Walter
Another aspect of Pseudo-Socialism, practised by Reagan?s Interior
Secretary James Watt, is to offer for immediate sale, for spot cash,
much more than the current market can absorb. For example, in April,
1982, Interior leased out coal reserves in the Powder River Basin of
Wyoming and Montana. The sale comprised 1.6 billion tons, at 3.5
cents/ton. Leases were for 50 years, with few development
requirements. The industry already had a 200 year supply under lease,
with the result that few bid, and they bid low. The winning bidders
were a tiny number of huge corporations, those with slack money to buy
reserves for the far future.
Meantime, on the Outer Continental Shelf (OCS), Watt planned to lease
a billion acres (ten times the area of California) before 1984. Before
that, major oil firms already had about 1/5 of that area under lease,
looking many years or several decades ahead of need. This helps
explain why a contemporary Alaska sale, on old Naval Petroleum Reserve
(NPR 4), fetched only 14% of the anticipated amount.
Who buys to hold these vast reserves for distant future use? They are
of investment grade only for those with waiting power. Unripe lands
and resources are probably the most closely held assets there are.
Poor people and small businessmen need busy capital right now. Only a
few of the wealthiest people have the deep pockets and slack money to
buy far ahead, to maintain high reserve/output ratios. These markets
in far future values are their special preserve.
What is being bought? Are these not "leases,"
contracts to pay rent? No, these leases are not that. Here is the
heart of Pseudo-Socialism. The U.S. Government leases mineral-prone
lands under the "Bonus Bid System," whereby most of the
payment is required up front in spot cash. This makes a "lease"
more like a sale, a sale in which buyers are screened by their banking
connections rather than by their ability to find and produce
The bonus system originated on private uplands. It was a way for big
oil firms to dazzle various rustics, pressed for cash, by tempting
them with front money for their mineral rights. The companies had the
cash, the connections, and intimidating expertise; they wrote the
rules their way. The rules included a cap of 12.5% on the long-term "royalty,"
the only means by which lessors participated over the long pull, and
retained a share in gushers and bonanzas that proved in excess of
original estimates - estimates much better known to the bidders than
the lessors. When the companies moved onto public lands they brought
the same system with them. It was by then an
industry standard, and who can argue with that?
The only "bid variable" in this system is the bonus. With
the royalty capped, there are large potential surpluses to attract
bonus bids. The Physiocratic rule of compensation applies: a low
royalty translates into a high leasehold value. The advantage of this
to "the industry" -- meaning the largest firms that are its
most visible spokesmen and exemplars -- is that it screens out many
bidders, those pressed for front money. It reserves the field for a
much smaller number of players, increasing their bargaining power.
All that may sound familiar to students of 19th Century American
history, and the privatization of the vast Federal domain. It is a
long story of conflict between cash sales and more democratic means of
placing lands. Those with cash and bank connections naturally favored
cash sales. President Jefferson saw the merit in credit sales, so from
1801-20, sales were on credit. The system was badly administered, but
so were all other systems of land disposal tried in that era.
Collections became a problem, yet landownership was democratized. It
enabled Andrew Jackson to proclaim on Thanksgiving Day, 1835, "We
thank Thee for the absence of unemployment which in the King-ridden
countries of the world is causing widespread suffering among the
toiling masses and has led to riots ... (and that) there will be none
to freeze, starve, or be beset by the fear of want this winter or the
winters yet to come."
Following the period of credit sales, the return to cash sales
re-introduced front-money bias. Small owners still had ways of
fighting back, however, at the state and local levels. States and
counties and their subdivisions relied mainly on the property tax.
They used this with good effect, often quite deliberately, to induce
absentee speculators to release large holdings for sale and
settlement. The impact of land taxes is analogous to that of credit
sales. The specter of future taxes is capitalized into lower current
land prices. They in turn let one buy cheaper up front, in return for
a higher level of deferred payments. The net effect is like extending
permanent credit on equal terms to all potential buyers, something
private credit markets never do or could be expected to do.
In this era, local property taxes, mostly administered by counties,
were the most democratizing influence. They were a matter of intense
conflict between median Americans and speculators, some absentee (like
Cornell University in Wisconsin, documented by Paul Gates) and some
resident (like the Hudson Valley Patroons, documented by David Ellis).
There is a literature on these conflicts, inadequate but clear, but
missing from the dumbed-down and bowdlerized history texts
foisted on most students.
Thus, the property tax, especially on land, is twice effective as an
instrument of Distributive Socialism. First, it rifles in on the rent
surplus and socializes it. Second, it democratizes the ownership and
operating control of land. Thus it achieves something akin to the "worker
control" that is an ideal avowed by many modern Socialists,
melding egalitarian distribution with egalitarian management and
control. To be sure, it does so in a small-business framework, an
ideal that is traditionally Populist, not Marxist. However, in this
new post-Communist age, when Socialists are seeking new ways to
express their yearnings for the good society, they might want to
reconsider the value of this approach to worker control. Perhaps
Marx, like other reformers of his generation, was oversold on the
economies and inevitable triumph of large scale capital and
organization, and the substitution of capital for labor. Perhaps small
is beautiful, after all.
Today's industry is faced less with the property tax than the income
tax. Most state property taxes are applied only at low levels to
mineral-bearing lands. Worse, the most active leasing today is on the
OCS, outside the tax reach of any state or county, and so exempt from
The Federal income tax does reach out to the OCS. Its effect, however
is to redouble the industry's support for the bonus system by treating
bonuses most favorably. The bonus, being a cost of land acquisition,
might normally not be easily deductible or depreciable. Oil and gas
are exhaustible, however, so the bonus might reasonably be written off
slowly on a unit-of-extraction basis, or by means of the depletion
allowance where that is still used. In the distinctive conditions of
frontier oil exploration, however, much of the bonuses paid are
deducted before extraction even begins.
It works like this. In the normal course of exploration, some five
leaseholds are taken and explored for every one where post-leasing
drilling will show commercially producible hydrocarbons. The other
four may be "abandoned," which means the lessee formally
terminates the lease. At this time, which the lessee may choose at his
tax convenience, all bonuses previously paid are taken as current
expenses, fully deductible in the year of abandonment. In addition,
all pre-leasing exploration costs that the lessee assigns to the
abandoned leaseholds are expensed also. Thus, before extraction
begins, the exploring firm may have expensed 80% of its land
Expensing on so large a scale is useful, of course, mainly to large,
diversified firms with other income against which to take the
expenses. Partnerships of high-tax-bracket individuals are also
involved. This works in tandem with high front-money requirements to
screen out smaller, leaner firms, leaving easier pickings for the
larger firms and deeper pockets.
The lease not abandoned, whose value has been acquired and built-up
by costs that are mostly expensed, may now be sold as a "capital
asset," with all the preferential tax treatments appurtenant
thereto. The buyer, in turn, now begins a new set of games for
deducting his acquisition cost. We do not spell these out, but the
overall result is extremely easy tax treatment compared with most
Many economists allege that the bonus system is the best way to
collect rent from the public lands. The lands are public; the industry
pays for them; bidding is modestly competitive; and the industry is
subject to taxation. All those conditions seem favorable to making it
a case of applied Distributive Socialism. However, for the reasons
given, the net result deserves better to be called "Pseudo-Socialism."
III. ADMINISTERING PUBLIC LANDS FOR JUSTICE AND EFFICIENCY
Here are four corners of an effective policy for socializing rent
from public lands: participate in revenues; control time of lease
sales for the seller's best advantage; participate in exploration; and
participate in marketing. Some detail follows. The writer has
elaborated the points elsewhere.
A. Participating in revenues
- Defer payments. Access to private equity and credit is
extremely uneven, putting most potential bidders at a fatal
disadvantage relative to the wealthy few. Deferring payments
according to any uniform formula has the same effect as extending
long-term credit to all parties on equal terms.
- Vary payments according to what is on the site, as that is
disclosed by exploration and extraction. This shares risk with the
lessee, and has somewhat the same effect as providing insurance.
It does somewhat dilute incentives at the margin, but this can be
largely offset by sharing in costs. Arguably, such risk-sharing
actually raises marginal incentives, on balance. Such, at least,
is a standard theorem in the literature of income taxation. Such
variation of payments, as with a royalty, also shares other kinds
of risks, like price.
- Give credits for lessee inputs, writing these off against later
- Leave a bid variable to soak up any advantage of the leasehold
site that the lessor has overlooked in setting the parameter
charges, but sharp or sanguine bidders detect. Thus exploit the
Physiocratic rule of compensation.
- Limit the area leased to any one person or firm, especially
where there is a high royalty rate (lessor participation), and
consequent low cost to lessors of holding land unused. This is the
practise of private landlords, as analyzed and documented in the
works of Stephen Cheung.
B. Timing lease sales
Sales need to be deferred until the lands are economically "ripe,"
from the seller's viewpoint. Ripeness, roughly speaking, is a
condition when the growth rate of value over time falls to equal or
below the interest rate. "Value," in this context, is the
anticipated high bid. The tendency today is to time sales by industry
"nominations," meaning at the convenience of certain
powerful members of the industry. These may well be firms that have a
lead in exploring a certain frontier area, and a competitive edge to
exploit before other firms know as much as they. Even if several firms
are involved, every member of the group would like to get in on the
steep part of the growth curve, meaning growth of value.
C. Participating in exploration
Public landlords today generally know less about their own property
than do private firms. The firms have leave to range all over unleased
lands, taking seismic soundings, studying satellite images, developing
sophisticated, top-secret computerized models of the geology, even
doing a bit of exploratory, pre-leasing drilling. When potential
lessees know more than the public's agents, the latter's bargaining
power is deeply eroded.
The public may protect itself in several ways. One is to do some
drilling of its own -- it may hire the same contractors used by
industry. Another is by checkerboarding followed by "drainage
sales": sales of parcels abutting proved producing leaseholds. A
third is by registering all well logs.
D. Participating in marketing
Royalties received by lessors are a percentage of wellhead price, but
who sets the price? Transfer pricing scams are all too common in
an industry whose dominant firms are vertically integrated. The public
landlord may well want to take its share of production in kind, using
its own marketing agency, to avoid being exploited. The mere threat of
such a yardstick would have a profound effect on wellhead pricing.
E. Emulating good examples
Norway is probably the best example of a nation that harnessed its
public domain revenues of oil and gas for the public good. Botswana
has done remarkably well with its diamonds, another extractive
resource, guided by a one-time Schalkenbach grantee, Stephen R. Lewis,
Jr. Whoever wades into this complex subject should steep himself in
such good experiences, if only to prove that success, justice and
efficiency are possible, however rare.
Is there any chance that Distributive Socialism will make headway on
the OCS, and other Federal lands? There is always a chance. The
lands, after all, are public, as a matter of history and law. A
business-oriented administration need not call it any kind of "Socialism."
It should and might even actually pride itself on businesslike
management of public assets. It is our little secret that businesslike
management in this case is the essence of Distributive Socialism.
What about James Watt? He was the most unpopular figure in Reagan's
Cabinet, just as Douglas McKay was in Eisenhower's, and Albert Fall
was in Harding's. The public does not find giveaways and sweetheart
deals attractive. On the other hand the public does not always
recognize giveaways when there is some subtlety involved. The
appearance of open bidding, and substantial bonus payments for
leaseholds, may be enough to appease the public, the more so when the
appearance of true competition is reinforced by the endorsement of
many mainline economists.
What must be inculcated in everyone's thinking is the essential
difference between competition with front money, and competition
where payments are deferred. The first is limited competition, with
places reserved for an affluent few. The second is evenhanded,
democratic competition on a more level playing field, where
preferential access to credit confers no differential advantage. This
is the condition under which Distributive Socialism can coexist with,
and reinforce, a free market economy. It is achieved on fee simple
lands by subjecting them to heavy land taxes, whereby newcomers can
buy in at low prices in return for paying more over time. It is
achieved on public lands by writing leases with high lessor
participation over time, and low bonuses required up front.