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Ownership of Oil and Gas Rights: Implications for U.S. Farm Income and Wealth

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Listed:
  • Hitaj, Claudia
  • Weber, Jeremy
  • Erickson, Ken

Abstract

With the shale revolution, annual oil and gas production in the United States grew by 69 percent from 2005 to 2014, and almost 67 percent of the production occurred on farmland in 2014. The effect of oil and gas development on farm sector finances is not well understood. Limited nationwide information exists on issues such as the extent that farm operators and landlords own the rights to the oil and gas beneath their land, the value of the rights, or the timing and prevalence of leasing with energy firms. Subsurface ownership affects the ability of operators and landlords to benefit financially from development and to shape the terms on which it occurs. Using data from USDA’s Tenure, Ownership, and Transition of Agricultural Land (TOTAL) survey, Drillinginfo, and USDA’s 2012 Census of Agriculture, this report quantifies the farm sector’s oil and gas wealth and income, and provides a basis for understanding how booms and busts in oil and gas production and prices might affect farm-sector finances.

Suggested Citation

  • Hitaj, Claudia & Weber, Jeremy & Erickson, Ken, 2018. "Ownership of Oil and Gas Rights: Implications for U.S. Farm Income and Wealth," Economic Information Bulletin 276228, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersib:276228
    DOI: 10.22004/ag.econ.276228
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    References listed on IDEAS

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    1. Brown, Jason P. & Fitzgerald, Timothy & Weber, Jeremy G., 2016. "Capturing rents from natural resource abundance: Private royalties from U.S. onshore oil & gas production," Resource and Energy Economics, Elsevier, vol. 46(C), pages 23-38.
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    3. Jason Brown & John Pender & Jeremy G. Weber, 2013. "Rural wealth creation and emerging energy industries: lease and royalty payments to farm households and businesses," Research Working Paper RWP 13-07, Federal Reserve Bank of Kansas City.
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    8. Dubman, Robert, 2000. "Variance Estimation With USDA's Farm Costs and Returns Surveys and Agricultural Resource Management Study Surveys," Staff Reports 276685, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Grout, Travis & Ifft, Jennifer & Malinovskaya, Anna, 2021. "Energy income and farm viability: Evidence from USDA farm survey data," Energy Policy, Elsevier, vol. 155(C).

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