Joint bidding ban: pro- and anti-competitive theories of joint bidding in OCS lease sales

The Energy Policy and Conservation Act, enacted in January 1976, banned any company with world wide production greater than or equal to 1.6 million barrels per day of oil (and oil equivalent gas) from bidding with any other such company in sales of federal OCS leases. In the 35 OCS lease sales prior to Dec. 1975, about 10% of the total bids consisted of the point bids among the major oil companies. The ban was intented to increase competition for OCS leases. The bidding procedures for these tracts are discussed and analyzed.