Three Essays in Environmental and Resource Economics: Hydraulic Fracturing, Water Use, and Marine Recreational Fishing

Abstract

This dissertation includes three essays in environmental and resource economics. The first two pertain to important topics in relation to the upstream oil and gas industry in the U.S. The third pertains to marine recreational fishing demand in the Gulf of Mexico. In the first essay, I study two interrelated issues related to the hydraulic fracturing industry’s water use in Texas. Using a proprietary dataset of well-level completion reports, I show how firms’ propensity to report detailed information on water use varies depending on whether the well is located within a groundwater conservation district— an area where groundwater availability is a concern. Next, I show a causal link between the industry’s water use and declining local groundwater levels. These issues are important due to the rapid increase in hydraulic fracturing activity, along with its rising water use per well, which has created many local concerns about the impacts on water availability and the disposal of wastewater produced from these wells. In the second essay, I use the results of a 2008 U.S. Geological Survey assessment of oil and gas resources as a natural experiment to study various aspects related to oil and gas leasing activity. Specifically, I study how upstream firms use free and publicly available information as an aid to acquire mineral rights in areas with better geology and negotiate more favorable terms on leases. The findings are important as they contribute to the literature on the value of information in the oil and gas industry, and suggest several implications of government-funded resource assessments related to welfare and bargaining in the oil and gas leasing market. In the third essay, I study marine recreational fishing demand in the Gulf of Mexico. I make an empirical contribution by exploiting a new data set to study how various site characteristics and amenities influence the fishing site choices of private boat anglers. I also make methodological contributions by estimating expected catch for each site using a spatial-temporal technique not previously used in similar studies, and aggregating less relevant fishing sites in a new way, helpful to reduce computational burden by nearly three-fourths.