Using a unique land transaction from the
1860s in the Western U.S., this paper examines whether the presence of biological
and cultural resources on private and federal land increase drilling costs to
the U.S. natural gas industry. Our results suggest that the presence of these
resources can increase costs, but the effect depends on the land type and which
resources are being protected. The presence of threatened and endangered
species increase drilling costs significantly on both federal and private
lands; whereas the existence of migratory wildlife like elk and pronghorn does
not. Cultural resources have a differentiated impact-they raise drilling costs
significantly on federal lands, but not on private lands.
JEL classification numbers: C23, Q58.
Species, U.S. Natural Gas, Cultural Resources, Drilling Costs.