Economics ETDs
Publication Date
Summer 8-1-2023
Abstract
The dissertation aims to analyze the economic and social consequences of unconventional oil and gas (UO&G) production in the Permian Basin, located in southeastern New Mexico and West Texas. The first paper focuses on the effect of methane reduction regulations imposed by the United States (US) government on the production of natural gas and the drilling of new wells. Specifically, the question asked is “what is the impact of methane reduction regulations on the drilling of new wells and the production of natural gas over a 40-year time horizon?” I develop dynamic optimization in a system dynamic setting to assess the impacts. The simulations suggest that the methane regulations have a small effect (around 1% decline) on production and the number of wells drilled in the basin throughout the time horizon. Further, the total profit declines by 25% to 32%.
The second research article examines the impact of oil and natural gas tax revenues on the state of New Mexico’s expenditures on roads, education, and health infrastructure. Implementing a two-way fixed effect model with annual data from 2008 and 2018, I find that UO&G tax revenue does not impact road expenditures whereas health services see about a 1.9% increase in expenditure. For education, the UO&G tax revenue increases its expenditure by 1.8%.
The third paper investigates the effect of UO&G activities on road accidents in the New Mexico portion of the Permian Basin. Using monthly spatial data on crashes and well activity in the basin obtained from various government agencies, a Poisson model with fixed effects is employed to study the effect. The findings suggest that while the completion and production periods do not significantly impact accident rates, the drilling stage of well development increases the accident rate by 3%.
Degree Name
Economics
Level of Degree
Doctoral
Department Name
Department of Economics
First Committee Member (Chair)
Dr. Janie Chermak
Second Committee Member
Dr. Kira Villa
Third Committee Member
Dr. Xiaoyang Wang
Fourth Committee Member
Dr. Bruce Thomson
Language
English
Keywords
oil and gas, Permian Basin, New Mexico
Document Type
Dissertation
Recommended Citation
Sarkar, Aditi. "THE ECONOMIC IMPACT OF OIL AND GAS PRODUCTION IN THE PERMIAN BASIN." (2023). https://digitalrepository.unm.edu/econ_etds/143
