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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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    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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