Discipline: Social, Behavioral, and Economic Sciences
Subcategory: Social Sciences/Psychology/Economics
Room: Park Tower 8212
Alyssa Latuchie - University of New Mexico
Water is an input to both oil and gas production, through the well completion of hydraulic fracturing, and agricultural production. Often times these two industries, agriculture and oil and gas, share geographies and that leads to local competition over this resource. We hypothesize that when this competition occurs there is a trade-off between oil and gas production and agricultural production. This topic has been research theoretically, but has been little empirical research into these effects. Using data from the USDA annual crop surveys and FracFocus, we investigate if the water usage for hydraulic fracturing has an effect on the agricultural productivity over 5 states; California, Colorado, New Mexico, Oklahoma, and Texas. Using a fixed effect model, we control for climate factors, agricultural prices, as well as year and state fixed effects. We are able to tease out a significant decrease in the agricultural acres harvested and total crop value when water used for hydraulic fracturing increases. From this analysis, we find that if the volume of water used for hydraulic fracturing increases by 10%, the agricultural acres harvested in counties where hydraulic fracturing has occurred would change by 0.15% to -3.5% and the value of the crops harvested change by 0.46% to -12.12% depending on the state. When we further examine the one state in which a positive trade-off is found we see that this state has characteristics that require more detailed data to understand this relationship. Overall, the findings suggests that oil and gas production results in a trade-off with agricultural production and this trade-off has policy implications for both industries.
This paper is one of the first to explore this topic, and future research will be necessary to fully understand this trade-off. Since the results are highly dependent on location, more granular data could help explain some of the results found. This additional data could help understand how proximity to a well could influence this trade-off, which could be important in any future work. These findings could help influence water use and diversion policies along with produced water re-use possibilities.
Funder Acknowledgement(s): This material is based upon work supported by the National Science Foundation under Grant Number 1345169. Any opinions, findings, and conclusions or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the views of the National Science Foundation.
Faculty Advisor: Janie Chermak, firstname.lastname@example.org
Role: I am the primary researcher on this paper. All of the research and work for this paper is my own.