Marcellus Shale and structural breaks in oil and gas markets: The case of Pennsylvania

Potts, Todd; Yerger, David B.

doi:10.1016/j.eneco.2016.04.017

Cited by 14 publications

(3 citation statements)

References 16 publications

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Section: Literature Reviewmentioning

confidence: 99%

“…Two recent studies pertinent to this paper are from Potts and Yerger (2016) and Aruga (2016). Potts and Yerger (2016) examined the rise in PA’s production from Marcellus Shale and its potential impact on national gas prices. They found evidence of a structural break in early 2009 coinciding with the onset of rapid rise in production and, more importantly, that increased production in PA post-break led to a lower national average price of natural gas albeit this impact was only in the short-run versus pre-break when the impact was minimal.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Our study time frame runs from 1989 to 2014, allowing us to examine the potential impact of the Shale gas boom in the co-integration of prices in the region[2]. Our study is similar to Potts and Yerger (2016) in that we specifically examine the Marcellus Shale boom and its impact on the natural gas market and Aruga (2016) in that we test for market co-integration. On the other hand, our analyses are carried out on a more micro level both in terms of geographic area of study, and the levels of price co-integration tested, compared to the two previous studies.…”

Section: Literature Reviewmentioning

confidence: 99%

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Marcellus Shale play and the cointegration of natural gas markets in the Northeast

Arano

Velikova

Gazal

2018

IJESM

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Purpose The development of the Marcellus Shale Play has altered the geography of production in the USA, particularly in the Northeast natural gas market. The purpose of this paper is to examine its impact on an already integrated industry. Design/methodology/approach The authors utilize the methodology of co-integration and focus on the geographic reach of the Marcellus region to examine movements of prices across the upstream, midstream and downstream segments of the industry. Findings The results of this paper indicate that prices across segments remain strongly co-integrated with the boom in production. The short-run dynamics, however, reveal a slower adjustment to the long-run equilibrium following the boom, particularly for wellhead to city-gate and wellhead to residential prices. Originality/value The growth in delivery infrastructure has not kept up with the boom in production creating bottlenecks. The supply shock brought about by the boom in production has not altered previously established co-integrating relationships but has altered the speeds of adjustment towards the long-run equilibrium.

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Section: Literature Reviewmentioning

confidence: 99%