The Wall Street Journal

The Shale Gas Secret
The Wall Street Journal

‘Whoever owns the soil, it’s theirs up to Heaven and down to Hell. » So goes the ancient common-law principle. Today, however, almost no major country recognizes full subsurface private property rights, except for the United States.

We mention this because that blessing of American jurisprudence helps explain one of the few bright patches in the Obama economy—the booming production of shale gas and, increasingly, oil. The U.S. ranked 159th in GDP growth last year. But in natural gas production, it’s now No. 1.

What has given the U.S. its edge is that the early development risks were largely borne by small-time entrepreneurs, drilling a lot of dry holes on private land. These « wildcat » developers were gradually able to buy up oil, gas and mineral leases from private owners while gathering enough geological data to bring in commercial producers.

Meantime, some of the property owners who leased their mineral rights to companies have received royalty checks, typically worth at least 12.5% of production value. That’s encouraged further leasing and exploration, generated popular momentum for fracking, and brought development to previously depressed regions such as western Pennsylvania and the Bakken area of North Dakota.

Les États-Unis, l’un des seuls pays où les ressources naturelles sont la propriété du propriétaire du terrain et pas celle du gouvernement. Résultat: un secteur dynamique qui, au lieu de favoriser les gros joueurs (qui sont les seuls avec un accès facile au gouvernement), favorisent plutôt l’émergence de petits entrepreneurs.

Un clou de plus dans le cercueil des partisans de la nationalisation, de l’étatisation et des ennemies de la propriété privée. Pour le Québec, c’est un modèle à imiter car c’est le seul modèle qui permet de respecter les intérêts des entrepreneurs et la population !