Economic models of United States petroleum production

This dissertation discusses three different aspects of modeling petroleum production. The first topic is the modeling of oil production in the lower 48 states of the United States. This region of the U.S. is considered by geologists to be a mature basin in the sense that a high degree of exploratory effort has taken place here. As a result, there is sufficient data available with respect to oil reserves so as to construct a production forecast model including this important geophysical constraint. Besides reserves, the model includes the real wellhead price of oil, and a production constraint imposed by the Texas Railroad commission.; The second topic is the supply and demand of natural gas in the entire U.S. Supply is specified as a function of the real wellhead price of gas, the real wellhead price of oil, and the stock of gas reserves in existence at the beginning of the year. Demand is specified as a function of the real wellhead price of gas, the real price of coal at the mine, and real GDP. Several different functional forms and estimation techniques are tried without great success. Augmented Dickey-Fuller (unit root) tests are performed with the results indicating that each of the above mentioned series possess a unit root and therefore behave as random walks. The series are tested for cointegration. Finding that cointegrating vectors do exist, vector error correction models are specified, estimated and interpreted.; The third topic is the modeling of oil reserve additions in the United States. A geophysical model of oil reserve growth which incorporates the concept of diminishing returns to exploratory effort is combined with an economic model of exploratory effort. The combined model offers us the opportunity to trace the impact of ceteris paribus changes in the economic variables to their effect on oil reserves. The model is applied to a hypothesized increase in the corporate tax rate.