Trophy Hunting versus Manufacturing Energy: The Price Responsiveness of Shale Gas

Newell, Richard G.; Prest, Brian C.; Vissing, Ashley

doi:10.1086/701531

Cited by 20 publications

(15 citation statements)

References 40 publications

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“…The coefficients on well depth and length are positive, suggesting it takes longer to complete deeper and longer wellbores, which is intuitive. We find modest coefficients of mixed-signs on the price of the well's co-produced by-product (here, the price of natural gas), consistent with Newell, Prest and Vissing (2019). The gas price elasticities range from -0.15 to +0.18.…”

Section: Spud-to-production Duration Estimation Resultssupporting

confidence: 73%

“…We estimate the relationship in first differences to make the revenue and drilling series stationary. For an explanation of this specification, see Newell, Prest and Vissing (2019). in drilling activity.…”

Section: Drilling Estimation Methodsmentioning

confidence: 99%

“…9. This is a slight departure from the method in Newell, Prest and Vissing (2019), where we also used reservoir information to help classify gas wells and also treated certain directionally-drilled gas wells in Texas as unconventional. We did this because some directionally-drilled oil wells outside of Texas are clearly conventional based on when they were drilled, their reservoirs, their productivities, and their type curves.…”

Section: Datamentioning

confidence: 99%

“…In this section, we model the time from spud to initial production to estimate whether operators adjust completion speed in response to price changes. We estimate the spud-to-production time distribution using survival time models with time-varying coefficients, as in Newell, Prest and Vissing (2019). We assume that this distribution follows a gamma distribution whose mean can be shifted by changes in oil and gas prices, leading to a standard maximum likelihood estimation approach.…”

Section: Duration Modelmentioning

confidence: 99%

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The Unconventional Oil Supply Boom: Aggregate Price Response from Microdata

Newell¹,

Prest²

2019

The Energy Journal

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We analyze the price responsiveness of U.S. conventional and unconventional oil supply across three key stages of oil production: drilling, completion, and production. Drilling is the most important margin, with price elasticities of 1.3 and 1.6 for conventional and unconventional drilling respectively. Well productivity declines as prices rise, implying smaller net supply elasticities of about 1.1 and 1.2. Despite similar supply elasticities, the price response of unconventional supply is larger in terms of barrels because of much higher production per well (~10x initially). Oil supply simulations show a 13-fold larger supply response due to the shale revolution. The simulations suggest that a price rise from $50 to $80 per barrel induces incremental U.S. production of 0.6MM barrels per day in 6 months, 1.4MM in 1 year, 2.4MM in 2 years, and 4.2MM in 5 years. Nonetheless, the response takes much longer than the 30 to 90 days than typically associated with the role of "swing producer.

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Section: Spud-to-production Duration Estimation Resultssupporting

confidence: 73%

Section: Drilling Estimation Methodsmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

Section: Duration Modelmentioning

confidence: 99%

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The Unconventional Oil Supply Boom: Aggregate Price Response from Microdata

Newell¹,

Prest²

2019

The Energy Journal

Self Cite

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“…24 Combining the industry resource cost and the 21 We obtain the $16 by assuming a price elasticity of nonrenewable supply of two. This is the price elasticity of supply across all fossil sources, which exceeds the supply elasticity across single fuels, which themselves show evidence of raising in recent years Vissing 2019). 22 Expanding renewables the first MWh costs only $22 more than the nonrenewable alternative whereas the last MWh of renewables costs $22 + 50 + 16.…”

Section: Iiib Renewable Electricity Generationmentioning

confidence: 99%

An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending

Fitzgerald

Hassett²,

Kallen

et al. 2020

SSRN Journal

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We estimate possible effects of Joe Biden's tax and regulatory agenda. We find that transportation and electricity will require more inputs to produce the same outputs due to ambitious plans to further cut the nation's carbon emissions, resulting in one or two percent less total factor productivity nationally. Second, we find that proposed changes to regulation as well as to the ACA increase labor wedges. Third, Biden's agenda increases average marginal tax rates on capital income. Assuming that the supply of capital is elastic in the long run to its aftertax return and that the substitution effect of wages on labor supply is nontrivial, we conclude that, in the long run, Biden's full agenda reduces full-time equivalent employment per person by about 3 percent, the capital stock per person by about 15 percent, real GDP per capita by more than 8 percent, and real consumption per household by about 7 percent. *We appreciate discussions with John Cochrane as well as Jeremy Weber and other economists at the Council of Economic Advisers.

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Energy Price Jumps, Fat Tails and Climate Policy

Mason

Wilmot

2021

Environ Model Assess

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Trophy Hunting versus Manufacturing Energy: The Price Responsiveness of Shale Gas

Cited by 20 publications

References 40 publications

The Unconventional Oil Supply Boom: Aggregate Price Response from Microdata

The Unconventional Oil Supply Boom: Aggregate Price Response from Microdata

An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending

Energy Price Jumps, Fat Tails and Climate Policy

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