Browsing by Author "Upton, Gregory B. Jr."
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Item Decomposing Crude Price Differentials: Domestic Shipping Constraints or the Crude Oil Export Ban?(2017) Agerton, Mark; Upton, Gregory B. Jr.; James A. Baker III Institute for Public PolicyOver the past five years the U.S. domestic crude benchmark, WTI, diverged considerably from its foreign counterpart, Brent. Some studies pointed to the crude oil export ban as the main culprit for this divergence, but pipeline capacity was also scarce during this time. To understand the drivers of domestic crude oil discounts, we decompose domestic price differentials for multiple crudes into the contributions of shipping and export constraints. We find that scarce pipeline capacity explains the majority of the deviation of mid-continent crude oil prices from their long-run relationship with Brent crude, while refining changes explain very little. This implies that the deleterious effects of the export ban may have been exaggerated.Item The Economics of Natural Gas Flaring in U.S. Shale: An Agenda for Research and Policy(James A. Baker III Institute for Public Policy) Agerton, Mark; Gilbert, Ben; Upton, Gregory B. Jr.; James A. Baker III Institute for Public PolicyFlaring of natural gas associated with U.S. unconventional tight oil production is a significant environmental and policy issue for the sector. We marshal granular data to identify the bottlenecks in the oil and gas value chain that physically cause upstream flaring at the well. Motivated by this descriptive analysis, we further analyze the economic reasons for flaring, market distortions that could exacerbate it, and the cost to society of flaring. We lay out an agenda for researchers and policymakers charged with understanding and regulating flaring.