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Patchwork Policies, Spillovers, and the Search for Oil and Gas

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  • Eric Lewis

Abstract

The United States has a complex patchwork of mineral ownership, where rights to oil and gas may be owned by the federal government, state governments, or private agents. I show why the policies imposed by one owner have theoretically ambiguous spillover effects on the drilling and production outcomes of neighboring plots of land. Exploiting a natural experiment in Wyoming with exogenous ownership assignment, I find significant spillovers: federal land close to state land has a lower probability of drilling than federal land far from state land.

Suggested Citation

  • Eric Lewis, 2019. "Patchwork Policies, Spillovers, and the Search for Oil and Gas," American Economic Journal: Economic Policy, American Economic Association, vol. 11(1), pages 380-405, February.
    • Handle: RePEc:aea:aejpol:v:11:y:2019:i:1:p:380-405
    Note: DOI: 10.1257/pol.20160373
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    References listed on IDEAS

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    7. Mitch Kunce & Shelby Gerking & William Morgan, 2002. "Effects of Environmental and Land Use Regulation in the Oil and Gas Industry Using the Wyoming Checkerboard as an Experimental Design," American Economic Review, American Economic Association, vol. 92(5), pages 1588-1593, December.
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    Cited by:

    1. Paul A. Brehm & Eric Lewis, 2021. "Information asymmetry, trade, and drilling: evidence from an oil lease lottery," RAND Journal of Economics, RAND Corporation, vol. 52(3), pages 496-514, September.
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    More about this item

    JEL classification:

    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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