land rent and utility bills

In today's news, British Gas is raising its prices yet again. If the people who own oil and gas fields had to pay land rent, would the prices rise much faster? The answer is no.

If they charged much more, users would simply move to other sources of energy - nuclear, biomass, wind, solar, etc. But land rent would ensure that the oil and gas industries do not disappear: if the companies lost sales, their land value and thus their land rent would fall until an equilibrium was reached.

It is conceivable that we might use less fossil fuels and use more renewables, and we might have to pay slightly more in the medium term, but the transition would be spread over several years. But the costs would be dwarfed by the financial and other benefits.

1. The really big change is saving the planet from the vast costs of pollution and global warming.
2. Further savings come from reducing our reliance on a single fuel (usually oil) and thus reducing the global tensions and wars that this brings.
3. With no incentive to keep unprofitable land, gas and oil fields would come onto the market. This allows genuine competition and thus lower prices. Meanwhile, alternative energy sources have more customers and hence can develop greater expertise and economies of scale.
4. Finally, land rent is spent on all of society. All society uses fuel, all society benefits from land rent. The difference is that land rent goes to those who most need it.

In summary, as regards the energy industry, the costs of land rent are negligible, and the benefits are enormous.