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Effects of stricter environmental regulations on resource development |
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| Institution: | 1. Department of Economics, University of Pittsburgh, Wesley Posvar Hall, Pittsburgh, PA 15260, USA;2. School of Economics, University of Queensland, Colin Clark Building, St. Lucia, Brisbane, QLD 4072, Australia;1. The World Bank, United States;2. Georgetown University, United States;1. The Robert Day School of Economics and Finance, Claremont McKenna College, 500 E. Ninth Street, Claremont, CA 91711, USA;2. Department of Economics, College of William and Mary, P.O. Box 8795, Williamsburg, VA 23187, USA |
| Abstract: | This analysis seeks to understand whether changes in oil regulation brought about by the shale revolution have restricted the pace of drilling and production. This hypothesis is tested using data on North Dakota and Montana both before and after North Dakota increased regulations that raise fixed costs. Results generally find that the new regulations had no statistical impact on the pace of drilling and production, however it is found that smaller operators reduced their production and exited. These results are instructive for policymakers who weigh the loss of economic welfare against improved environmental quality when deciding on new regulations. |
| Keywords: | Oil and gas regulation Shale oil Drilling Firm exit L51 L71 Q35 Q53 |
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