Author ORCID Identifier
Semester
Summer
Date of Graduation
2024
Document Type
Dissertation
Degree Type
PhD
College
Davis College of Agriculture, Natural Resources and Design
Department
Division of Resource Economics & Management
Committee Chair
Alan R.Collins, Ph.D.
Committee Co-Chair
Xiaoli Etienne, Ph.D.
Committee Member
Doolarie (Dee) Singh-Knights, Ph.D.
Committee Member
Hodjat Ghadimi, Ph.D.
Abstract
This dissertation consists of three essays on energy-related state policies and energy transition. Each paragraph below refers to the three abstracts for the three chapters in this dissertation, respectively.
The first essay is entitled: “Impacts of State Tax and Resource Ownership Policies on Extraction: Evidence from U.S. Natural Gas Production”. The innovation of combined use of horizontal drilling and hydraulic fracturing technologies during the 2000s has allowed natural gas producers in the United States to extract natural gas and liquids from deep shale formations in a cost-efficient manner. This essay evaluates whether unconventional gas production responds to tax changes, and whether the current tax policies provide support for or dis-incentivize growth in the shale gas sector. State-level data from seven of the largest shale gas-producing states are evaluated from 2007 to 2020 in regression analyses. Based upon panel vector autoregression models, lagged quarterly changes in tax collected have a negative significant, but limited impact on both natural gas and shale gas production in the short run. These findings also contribute to an assessment of the long-term impact of taxation. Considering the long-term impacts, based on the forecast error variance decomposition analysis, the industry gets stabilized, although most of the variation in natural gas production is accounted for by its own shocks and shocks from new producing unconventional wells. In the long-term, tax collected has no explanatory power. An additional analysis utilized a random effects model and found that impact fees do not significantly affect either natural gas or shale gas production relative to severance taxes. Conversely, we find that in states with volume-based tax rates, quarterly natural gas production increases by 2.5% relative to those states with revenue-based tax rates. We also find that the existence of a forced pooling law decreases quarterly natural gas production with an estimated decline of between 2.6% to 3.8% relative to states where no forced pooling law exists. These findings show that the restrictions imposed by forced pooling laws have larger impacts on production compared with different severance tax structures.
Essay two is entitled: “Impact of state policies on renewable energy: A county-level spatial panel analysis”. According to EIA (2023), renewable energy (RE) generation capacity in the U.S. has grown to 331,000 MW. Given the numerous state policies incentivizing RE adoption, this research examines their impact on RE generation capacity. Empirical analyses are conducted examining state and county-level policy instruments along with economic, political, and demographic factors that drive generation capacity changes for wind, solar, hydro, and geothermal energy. Using a panel dataset of 3017 counties from 2009 to 2019 in the contiguous US, we empirically examine the impact of policy instruments on RE generation capacity from four perspectives: (1) aggregated across all four energy sources, (2) solar and wind capacity only, (3) hydro and geothermal energy capacities only, and (4) the presence of generation capacity for each energy source separately. Additionally, we explore the spatial spillover effects from neighboring counties’ for state policies [by incorporating county-level variations] that may affect RE generation capacity of a particular county. Results show that the spillover effects are more statistically significant than the direct effect which underscores the need for spatial analysis. Our findings highlight that the Renewable Portfolio Standards (RPS) expressed as percentage targets (%), accounting for regional variations, significantly promote RE generation capacity. This RPS variable, expressed as a percentage, more accurately measures the impact on RE generation capacity by considering county-level exemptions. The impact of RPS (%) is consistent across all models and on all the four different variations of the dependent variable. For example, a 1% increase in RPS (%) has a total effect of 2.03MW on RE generation capacity. All other policy variables used in this study are dummy variables based on state-level data and do not account for county-level variations. Notably, the state policy of mandatory utility green power option (MGPO) emerges as the key driver to have a substantial significant and positive impact on RE generation capacity compared to other policies considered in this study. This implies harnessing the market dynamics and consumer preferences, as done by MGPO, can lead to significant increase in RE generation capacity when compared to mandatory regulatory measures. MGPO is more influential on hydro and geothermal combined than solar and wind. While financial incentives like sales tax and property tax incentives positively impact RE generation capacity, energy market deregulation and Energy Efficiency Resource Standards (EERS) have a negative statistical significance on RE generation. Specifically, EERS shows no significant impact on hydro and geothermal energy but negatively impacts solar and wind capacity in combined spatial models. This essay confirms the differential impact of policies across various sources of renewable energy.
The third essay examines the “Impact of Development on Energy Transition”. In this essay, we measure the impact of the development of a country on the energy transition. Economic development is often linked to the cultural values of a nation. The Parasite-Stress Theory of Values (PSTV) suggests that regional variation in infectious diseases influences a nation’s culture and values. Drawing on rich and thought-provoking literature on the Parasite Stress Theory of Values, we employ a two-stage least squares method to examine the potential relationship between the historical prevalence of infectious diseases and a nation’s cultural influence on economic development. In the subsequent stage, we predict the level of the energy transition. From the first stage result, we find a significant negative impact of the instrumental variable on the indicators revealing a geographical trend associated with the historical prevalence of infectious diseases among the countries. Our results also reinforce the presence of a temporal pattern in the stages of energy transition.
Recommended Citation
Thomas, Pinky, "Three Essays on Energy related to State Policies and Low Carbon Transitions" (2024). Graduate Theses, Dissertations, and Problem Reports. 12617.
https://researchrepository.wvu.edu/etd/12617
Embargo Reason
Publication Pending
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