AN ECONOMETRIC MODEL OF PETROLEUM DRILLING IN TEXAS (ENERGY ECONOMICS, SIMULATIONS)

This dissertation describes an econometric model of petroleum drilling in the state of Texas. The model is composed of a set of equations describing: (1) the number of wells drilled each year, (2) the number of successful wells and (3) the resulting volume of reserve additions. Due to uneven sample sizes, the model is broken into two separate blocks and each block is independently estimated. Historical simulations are performed to verify the predictive accuracy of the estimated model. The model is combined with a recent econometric model of Texas oil and natural gas production. As an example to demonstrate how the integrated model can be used in policy analysis, the effect of an increase in the severance tax on oil and natural gas production is analyzed.