Scholarship & Research
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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.Item Prices, money and the real economy(Montana State University - Bozeman, College of Agriculture, 1991) Kasperick, John P.; Chairperson, Graduate Committee: Douglas J. Young.This thesis examines the effects of output price surprises, energy price surprises, and money surprises on aggregate real economic activity for the years 1948-1988. Three measures of real activity are utilized; the unemployment rate, the log value of output, and the log value of private employment. Both M1 and M2 definitions of money are employed. Model 1 is first developed, which is a replication of Gray and Spencer's 1990 study. From this a reexamination of the empirical role of output price surprises, energy price surprises, and a natural rate measure in determining the level of real aggregate activity is undertaken. Next, Model 2 is developed which includes money surprises along with the various other independent variables in determining real economic activity. Non-linear three stage least squares is the estimation technique employed in estimation of both models. We find that output price surprises are positively and significantly correlated with aggregate real economic activity. Energy price surprises are insignificant in determining real activity. Money surprises, when included with the other explanatory variables, are found to have no direct effect on real activity but operate indirectly through prices. Finally, not much variation in unemployment is explained by the variables of interest.