Scholarship & Research
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Item Price relationships in the U.S. nitrogen fertilizer industry(Montana State University - Bozeman, College of Agriculture, 2018) Gumbley, Thomas J.; Chairperson, Graduate Committee: Anton BekkermanThis study estimates the price dynamics in the U.S. nitrogen fertilizer industry, measures information flow efficiency in spatially separated fertilizer markets, and measures to what extent structural changes in corn and natural gas markets may have altered these price dynamics and information flow relationships. A vector error correction model is used to measure the short-run and long-run relationships between nitrogen fertilizer markets, natural gas markets, and corn markets. The results show that price information flows from the central market of New Orleans to inland regional markets. The efficiency of this information flow increased in the period after the Renewable Fuel Standards increased the demand for corn.Item North Dakota natural gas : the decision to flare(Montana State University - Bozeman, College of Agriculture, 2015) Stiglbauer, Gordon Case; Chairperson, Graduate Committee: Timothy FitzgeraldUnconventional oil and natural gas production in North Dakota's Bakken shale formation has caused a boom in the state's production. As production in the Bakken grows, wells are one-third of their produced gas, valued at roughly $1 billion per year. Using a well-level panel of monthly production, I explore potential determinants of flaring and provide insight into the decision to produce oil from wells that are not connected to the gas gathering system. Through initial linear regressions, I show that North Dakota Bakken wells are twice as much, on average, than Montana Bakken wells. Further, I find that unconnected wells are nearly four times as much as connected wells. I model the decision to connect wells through duration analysis to show that connection timing varies between operators of different sizes and that the threat of flaring penalties increases the hazard rate of connection. Lastly, I exploit variation between field oil production rules in North Dakota to find that the rate of rule compliance varies both by rule stringency and the size of the operator.Item Pipeline constraints in wholesale natural gas markets : effects on regional pricing and market integration(Montana State University - Bozeman, College of Agriculture, 2012) Avalos, Roger George; Chairperson, Graduate Committee: Randal R. Rucker.Natural gas markets in the United States depend on an extensive network of pipelines to transport gas from production fields to end users. While these pipelines are essential for the operation of natural gas markets, their capacity sets a physical limit on the quantity of gas that can be moved between regions. Taking advantage of a rich data set of daily pipeline capacities and flows, this thesis tests the effects of binding pipeline constraints directly. It is found that these constraints affect the citygate prices for the Florida and Southern California markets. The Law of One Price is tested using cointegration techniques and found to hold when pipeline flows are not constrained, and break down during constrained periods. It is also shown that cointegration techniques may not identify bottlenecks between regions when bottlenecks are not severe, or when they only occur for limited periods of time. Contrary to earlier results, Southern California markets are found to be integrated with the national market. Cointegration tests using data from 14 market points suggest that regional wholesale natural gas markets in the United States are generally integrated into a national market.