Conservation of petroleum reserves in the United States, from a production point of view, becomes problematic even in the case of well-defined surface property rights. The migratory nature of those resources and the common law rule of capture have combined to create a classic example of the problem of the common pool. In the race to reduce their underlying hydrocarbon reserves to possession, holders of sub-surface mineral rights (which evolve from initial surface ownership) have been seen to exemplify the common pool situation; excessive spending to capture the resource and premature depletion of the resource base. Some economic theory and early empirical evidence indicate that the potential losses from overcapitalization toward drilling and premature reservoir depletion can be large in terms of both physical and economic waste in oil field development. / Given the premise that early fieldwide consolidation of a particular reservoir is the optimal solution to conserve the nonrenewable hydrocarbon natural resource, this paper identifies and quantifies the relationship between two separate methods to accomplish this objective--compulsory and voluntary unitization. By comparing the production and drilling activities of a state with a long history of successful and early governmentally sanctioned unitization (Louisiana) to a state with no such statutory requirement (Texas), we are able to discern differences in potential welfare loss between the two regimes. After controlling for geology, price, cost and other state-specific factors, we find that, over the period examined and contrary to the naive economic view that does not allow for private bargaining, more wells are drilled in Louisiana than in Texas and the difference between production rates of the two states is not statistically significant. / Source: Dissertation Abstracts International, Volume: 57-03, Section: A, page: 1240. / Major Professor: Philip E. Sorensen. / Thesis (Ph.D.)--The Florida State University, 1996.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_77673 |
| Contributors | May, David Lynn., Florida State University |
| Source Sets | Florida State University |
| Language | English |
| Detected Language | English |
| Type | Text |
| Format | 112 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
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