Sunday, November 16, 2008

Public Land Management

Alex Tabarrok proposes selling federally-owned Western lands (there is discussion at Matthew Yglesias). The problem with the proposal is that it would be extraordinarily difficult to do. It is not, however, as many commenters have been suggesting, because the land is not valuable; rather, it is because the rather considerable value of the land is based in part on its being administered in a way that (at present) could hardly be done by anyone other than the government.

The clearest way to see this is to look at what the Bureau of Land Management actually does, because the BLM is far and away the major adminstrator. (The other big land administrators -- the National Park Service, the Forest Service, the Fish and Wildlife Service, and the General Services Administration -- are dwarfed by the BLM in this respect and, in any case, except for the GSA, which manages things like federal buildings, mostly deal with lands that could only seriously be sold with massive restrictions.) The BLM handles (on its own) about 260 million acres. (I say 'on its own' because it also tends to handle mineral rights for land managed by other agencies.) About 160 million acres of this is used as public rangeland; about 45 million is leased for oil and gas production; some is leased for coal, some for geothermal, some for wind and solar, some for wood; all save a small portion of this land is available for recreational activities like camping, horseback riding, hiking, hang gliding, etc. In addition, the BLM manages right-of-way licenses. Suppose you want to string a cable for some important reason across the West; the existence of public lands allows you to do so, by getting a permit, without having to buy or pay hundreds of private owners or push the state for eminent domain. And the uses multiply.

When we look at what the BLM does, we see part of the problem with selling off the land. The land, or much of it, at least, is genuinely valuable, contrary to what some have suggested; a rather hefty portion of the American economy is affected by the management of these lands. But the chief value of the land is precisely that it stays open for any sort of use that might reasonably come up: it gets used for grazing if you can use it for grazing; if its mineral estate suddenly becomes economically viable, it is available for use; if it is suitable for a certain form of outdoor recreation, it can be used for that; if you need it for right of way, it is there for that; if there's a byproduct of production (like helium from natural gas), you can make sure that this byproduct doesn't go to waste but is actually diverted to a useful market; if solar and wind require massive amounts of land, there's plenty of land to choose from; and so forth and so on. And precisely because it is managed to be public land it retains its general-use value, and functions as a land and resource reserve for anything that might come up. But much of this land could only be useful to private owners if they managed so much of it as to be doing, effectively, what the BLM does for it: using it for whatever seems a good use, and (if none seems available) setting it aside until some good use comes along (which it often does). People primarily buy land, however, not to add to their general land reserve, but to serve some very specific range of functions; and, while you can use Nevada desert for a lot, it's hard to see how it could possibly be economically viable for anyone to use it for just a few things. Thus most of the land is very difficult to sell to anyone who can't, in fact, do what the BLM alread does with it; and very few people can seriously do that.

Which is not to say that you couldn't sell some of it. Some of the land is reasonably well-suited to particular uses, and you could sell some grazing land to ranchers, some oil production land to oil companies, some forest land to lumber companies, etc. The land you'd be selling is often more difficult to develop than the kind that such companies would prefer, but it would be economically viable. However, it's not really clear what you'd gain from the sale. Managed by the BLM, such brings in an income of several billion a year; companies can make use of the resources more cheaply if they pay permits rather than own it; you encourage competition by making access to the resources generally available; you guarantee that the land is not bound up for a single use if it could be used for several things; etc. Most of this would be lost on sale.

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