[wahern]

> Well, presumably you'd only get paid to not-drill if you otherwise had the drilling rights? So if you bought the rights to extract from an oil field in Alaska or the Gulf, you could get paid not to use them.

At least in the U.S., extraction operations are usually organized as LLPs--more specifically MLPs, where partnership stakes are publicly traded. This means anybody can easily acquire drilling or extraction rights with a simple online transaction, just like they can with corporate stock.[1] Whatever flaws a pay-to-abstain system has will be exploited at least as fast as any other easily exploited financial incentive scheme.

Even excluding publicly traded MLPs, the market for buying + selling partnership interests in drilling operations is remarkably liquid, at least in the U.S. and especially for long-established fields such as in Texas or California, which are perhaps the operations that could most easily exploit a pay-to-abstain incentive scheme by, e.g., overestimating their reserves. (New fields would be even easier to overestimate, but that could in large part be addressed by avoiding the scheme entirely and simply preventing extraction ahead time--e.g. by stopping the sale of Federal mineral rights, or using environmental laws to prohibit extraction, which is more easily done before an extraction operation is established.)

[1] The reason for this is various tax incentives which make direct ownership stakes and their passthrough income and deductions the most profitable investment structure. But the Schedule Ks are really annoying when doing your taxes. AFAIU an MLP is similar to an REIT (Real Estate Investment Trust), the purpose of which is also to provide an easily traded investment providing passthrough income and deductions. REITs have become notorious for effectively accelerating the exploitation of flawed real state regulations, policies, and taxation. They're not per se bad, but more efficient financial markets cuts many ways.

[sokoloff]

This plus many people own mineral rights that are impractical or likely non-economical to exercise if you have to actually do the work to get the resource out of the ground. If you take that obligation to zero, many more properties' mineral rights are valuable (which goes to the exploitable financial incentive scheme point you made).

I own the mineral rights to a plot that also has a house on it. It would suck for the house usage to drill for oil on that land and there might not be economically viable oil underneath (you only ever know statistically/via modeling until you drill)...

[ahepp]

I'm sure there would be challenges. In a lot of ways, they seem like the same challenges that have always faced OPEC.

It does seem like a scenario where you don't really want the efficiencies markets discover, which is why I mentioned the nationalization option. Not to suggest that option should be taken casually, or wouldn't come with its own set of challenges.