Recent Submissions

  • Alaska's ice roads and investment decision in drilling: an empirical analysis

    Azmi Wendler, Sarah; Baek, Jungho; Reynolds, Douglas B.; Herrmann, Mark (2019-08)
    This thesis applies Autoregressive Distributed Lag modeling techniques to estimate the effects of ice road season lengths on exploration activities in Alaska within the North Slope. This analysis uses data on winter off-road travel from 2001-2018 in monthly intervals against exploration wells spudded. It is found that while ice roads do not affect overall drilling activities in the North Slope, the lengths of the season plays significant part in exploration of new fields. While this subject has become a popular subject due to variations in the ice road season, no similar statistical analysis has been conducted to date. Oil prices, production and Alaska's oil policy were also found to be important variables in characterizing exploration activity.
  • Institutional structure and the optimal level of lying

    Hiser, Rodney F.; Logan, Robert R. (1999)
    This study is an interdisciplinary comparative analysis of two institutional structures and their relation to lying. The author examines institutional structure through an institutional continuum with contrasting ideal-types at opposing ends. These ideal-types are the "private property order" and the "bureau." The author models lying as a benefit-cost analysis and examines lying through a two-person model of society called the "information relation." Using the information relation, he shows the problem of lying is an agency problem between the informer and the informee. In two separate analyses, the author evaluates the ideal-types' tendencies to either allow or hinder lying. In the first analysis, the author identifies seven protection-from-lying strategies and compares their necessary requirements to the institutional constraints of the ideal types. In the second analysis, the author examines six social phenomena, within the institutional context of each ideal type, that affect people's benefit-cost ratio of lying. The author concludes that there exists a positive correlation between the degree of central planning and the optimal level of lying, as seen from the point of view of each individual in society. The author argues that a movement on the continuum away from the private property order toward the bureau tends to (1) breakdown community relations, (2) provide incentive for society members to adopt value relativism, (3) change the nature of competition, (4) lower society's overall material standard of living, and (5) create a social environment of mutual self-deception. The author sees important implications in this study for the economics of information, theories of government regulation, and the sociology of science.
  • Market impacts and global implications of U.S. shale development and hydraulic fracturing: an economic, engineering, and environmental perspective

    Umweke, Maduabuchi Pascal; Baek, Jungho; Patil, Shirish; Perkins, Robert; Reynolds, Douglas (2018-05)
    The United States oil industry is experiencing a revolution because of significant oil production from tight oil plays since the mid-2000s. Advancements in horizontal well drilling and hydraulic fracturing are powering this new chapter in oil development. Increased oil production has brought billions of dollars of new revenue to oil companies involved in tight oil exploration and production, new jobs in the oil industry, and more tax revenue to oil regions around the U.S. However, tight oil resources do not only exist in the U.S. An understanding of the U.S. tight oil development experience could bring value to stakeholders within and outside the United States, and provide lessons and templates applicable in other tight oil regions. This research examines the U.S. tight oil experience and draws lessons for aspiring tight oil regions on the engineering, economic, and environmental fronts. On the economic front, I have examined an autoregressive distributed lag (ARDL) model on key oil industry macroeconomic data (West Texas Intermediate oil price, tight oil production, and rig count) from 2007 through 2016, and the impact of oil price on tight oil development for the Bakken, Eagle Ford, Niobrara, and Permian tight oil plays. The results show that oil companies in different plays react differently to oil price signals and do so in relation to oil field development characteristics. In addition, oil production and drilling intensity in the Eagle Ford play is found to be most responsive to oil price increases than the Permian, Bakken, or Niobrara oil plays. The Permian play was most resilient during the 2014 through 2016 oil price plunge. Oil production does not fall in response to a decrease in oil price, equally as it rises in response to oil price increase. Tight oil operators are quicker in bringing drilling rigs to service as prices rise than they take them away in response to falling oil prices, but do reduce drilling significantly in response to an oil price plunge. These results have significant ramifications for operators and assets in the respective oil plays or future plays with similar development characteristics. On the engineering front, I used petroleum engineering oil production forecasting Decline Curve Analysis techniques, the Drillinginfo Software, and historical development data of U.S. plays, to conduct oil production forecast for seven U.S. tight oil plays. Forecast results are shown to be comparable to forecasts by the Energy Information Administration (EIA). Building on previous EIA geologic studies on non-U.S. tight oil plays, and by selecting best analogues from within U.S. tight oil plays, I have completed an economic assessment and uncertainty analysis for 10 non-U.S. tight plays using a simple fiscal tax regime. The results indicate that the Eagle Ford play in Mexico, the Vaca Muerta play in Argentina, and the Qingshankou play in China rank highest among the plays studied. Of oil price, royalty rate, discount rate, well cost, extraction tax, and recovery factor parameters evaluated, results indicate that oil price and well cost are among the biggest drivers of profitability in these plays. On the environmental front, I conducted case studies on the busiest U.S. tight oil plays (Bakken and Eagle Ford) and examined the impact of tight oil development on the environment. Local solutions to environmental challenges alongside environmental regulations are discussed and presented as possible templates for other aspiring plays. Since securing freshwater sources alongside wastewater management emerge as major issues in tight oil development, a cost comparison is conducted for reused water disposal versus one-use water disposal options, for a hypothetical development. Results indicate that on a cost-per-well basis, the reduction in water disposal volume from subsurface frack flowback retention improves water reuse economics; the water reuse option is preferable to one-use water disposal for U.S. oil plays. This result points to potential cost savings for reused water disposal in regions such as the Bakken with few disposal wells.
  • Up in smoke: exploring the relationship between forest firefighting and subsistence harvest

    Rodrigues, Alyssa V. S.; Little, Joseph; Greenberg, Joshua; Trainor, Sarah; Brinkman, Todd J. (2018-05)
    Wildland firefighting in Alaska is changing due to the impact of climate change on the boreal forest. Changes to the wildland firefighting regime could have significant impacts on community participation during fall subsistence hunting and, consequentially, food security levels. Many rural Alaska communities have mixed cash-subsistence economies in which people have to balance their time between earning an income and harvesting subsistence foods. Cash income is necessary to pay for things such as housing, electricity, gasoline, gun, ammunition, and other capital necessary to engage in subsistence. This dissertation aims to better understand the current relationship between Type 2, or hand crew, wildland firefighting and subsistence, primarily fall subsistence hunting, through several methods. Surveys and interviews were conducted with Type 2 wildland firefighters followed by policy recommendations. Econometric modeling of the wildfire attributes, community attributes, and firefighting wages and dispatches was conducted. Lastly, a food production simulation was conducted. Utilizing these various methods gives a well-rounded understanding of the relationship between firefighting and subsistence. Firefighting wages currently contribute to subsistence harvest productivity. As climate change lengthens the fire season, rural Type 2 fire crews will continue to participate in firefighting and fall subsistence hunting. Only under the most extreme estimates of future wildland fires does time spent fighting fire reduce time spent on subsistence fall hunting by much so that rural communities are unable to meet their subsistence needs.
  • On the willingness-to-pay for Elodea removal in the Fairbanks North Star Borough

    Kaczmarski, Jesse I.; Little, Joseph; Greenberg, Joshua; Fix, Peter (2018-05)
    The empirical research conducted herein addresses a public need for the funding of a project that would eradicate Elodea in the Fairbanks North Star Borough (FNSB). The eradication project has been outlined and approved by State and Federal agencies and has gathered funding to begin the eradication process. The study aims to develop a mean willingness-to-pay value for survey participants by shifting the funding burden to property tax payers. This body of work includes a primer on Elodea in the borough, an overview of contingent valuation, a parametric approach to willingness-to-pay, and results of the study conducted on Fairbanks property owners. The average willingness-to-pay per survey respondent is $50.32. In addition, 72% of survey respondents voted for the enactment of the program at their proposed cost level. These financial burdens took values of $10, $30, $60, or $120 per year for 4 years to fund the proposed program. A penalized maximum log-likelihood estimation found that the most significant predictors for the likelihood of a yes vote are the respondent's perceived risk to the ecosystem and recreational opportunities. Additionally, the respondents concern for the use of herbicides in the borough to treat the Elodea infestation is highly significant. The high level of prior knowledge throughout the survey indicates that respondents had established view on Elodea prior to the survey.
  • Aligning electricity energy policies in Alaska: analysis of the power cost equalization and renewable energy fund programs

    Villalobos Meléndez, Alejandra; Little, Joseph; Huskey, Lee; Baek, Jungho (2012-05)
    Most rural Alaska communities are not road connected and must cope with challenging arctic environmental conditions. Due to their remoteness and sparse populations, these villages depend on isolated non-grid connected electric generation systems that operate on fuel oil. In Alaska, the Power Cost Equalization program is a 25 year long energy subsidy that targets rural residents to provide energy costs relief. A more recent state incentive program, the Renewable Energy Fund, was developed to expand the use of renewable resources and lower the cost of energy. Some rural communities have benefited from this program and have integrated renewable energy to their systems, particularly installing Wind-Diesel systems. Both programs have congruent goals of alleviating dependence on high cost fossil fuels to generate electricity as means to foster development and higher quality of life in rural Alaska communities. However, their incentive structure may conflict. This paper provides a review of these two energy subsidy policies with a particular focus on the Power Cost Equalization program and offers potential changes to its structure such that social cost impacts to rural residents are minimized while removing incentive barriers against energy efficiency and integration of renewable energy in rural Alaska communities.
  • Invasive elodea threatens remote ecosystem services in Alaska: a spatially-explicit bioeconomic risk analysis

    Schwoerer, Tobias; Little, Joseph; Adkison, Milo; Baek, Jungho; Hayward, Greg; Morton, John (2017-05)
    This dissertation links human and ecological systems research to analyze resource management decisions for elodea, Alaska's first submerged aquatic invasive plant. The plant likely made it to Alaska through the aquarium trade. It was first discovered in urban parts of the state but is being introduced to remote water bodies by floatplanes and other pathways. Once introduced, elodea changes freshwater systems in ways that can threaten salmon and make floatplane destinations inaccessible. The analysis integrates multiple social and ecological data to estimate the potential future economic loss associated with its introduction to salmon fisheries and floatplane pilots. For estimating the effects on commercial sockeye fisheries, multiple methods of expert elicitation are used to quantify and validate expert opinion about elodea's ecological effects on salmon. These effects are believed to most likely be negative, but can in some instances be positive. Combined with market-based economic valuation, the approach accounts for the full range of potential ecological and economic effects. For analyzing the lost trip values to floatplane pilots, the analysis uses contingent valuation to estimate recreation demand for landing spots. A spatially-explicit model consisting of seven regions simulates elodea's spread across Alaska and its erratic population dynamics. This simulation model accounts for the change in region-specific colonization rates as elodea populations are eradicated. The most probable economic loss to commercial fisheries and recreational floatplane pilots is $97 million per year, with a 5% chance that combined losses exceed $456 million annually. The analysis describes how loss varies among stakeholders and regions, with more than half of statewide loss accruing to commercial sockeye salmon fisheries in Bristol Bay. Upfront management of all existing invasions is found to be the optimal management strategy for minimizing long-term loss. Even though the range of future economic loss is large, the certainty of long-term damage favors investments to eradicate current invasions and prevent new arrivals. The study serves as a step toward risk management aimed at protecting productive ecosystems of national and global significance.
  • Willingness to pay for reindeer meat attributes: a niche market study in Interior Alaska

    Burke, Nathaniel C.; Little, Joseph; Greenberg, Joshua; Wright, Christopher (2017-05)
    The Alaskan market for reindeer meat is unique. This study's aim is to estimate the average consumer willingness to pay for a range of reindeer meat attributes. These attributes include those that have a direct impact on meat quality such as cut and fat percentage, as well as intangible qualities, such as where the meat is grown and by whom it was raised. The study focuses on the preferences of people in Interior Alaska, specifically the Fairbanks Northstar Borough. The Reindeer Act of 1937 and supply infrastructure limitations have both contributed to a low level of reindeer meat production in Alaska. This study uses an adaptive choice-based conjoint to measure what attributes participants find most important and estimate how much they are willing to pay for those reindeer meat attributes.
  • Dichotomous choice contingent valuation willingness to pay estimates across geographically nested samples: case study of Alaskan Steller sea lion

    Turcin, Branka (2001-12)
    This thesis examines Willingness-to-Pay (WTP) for an endangered species across geographically nested samples using the Contingent Valuation Method (CVM). The samples range from the boroughs that contain critical habitat for the Steller sea lion to the state that contains these boroughs to the entire United States. Depending on the assumptions of the model, WTP varies tremendously from sample to sample. When WTP is unrestricted to the non-negative region, mean WTP for the United States is the highest and it is the lowest for the boroughs. The null hypotheses that mean WTP estimates are greater than zero were rejected for the boroughs and the state but it was not rejected for the United States based on the 95% confidence intervals. When WTP is restricted to the non-negative region, the WTP does not differ significantly from sample to sample. The estimation results may lead to dramatically different policy implications.
  • How oil prices impact the labor market: empirical evidence from Alaska

    Bocklet, Johanna; Baek, Jungho; Wright, Christopher; Little, Joseph (2016-05)
    The present paper uses a linear autoregressive distributed lag (ARDL) approach in order to test for symmetric effects of oil price changes on employment in the oil-industry and employment in non-oil industries in Alaska. The ARDL model allows for the examination of short and long-run effects of employment by changes in crude oil prices, interest rate and personal income. Using quarterly data over the period 1987-2015, the long run results show strong positive correlation of crude oil prices and oil-industry employment and negative correlation between crude oil prices and employment in the non-oil industry in Alaska, supporting the sectoral shift hypothesis. Furthermore, interest rates significantly impact employment in both economic sectors, in the short and in the long run. While a higher interest rate leads to job creation in the oil-industry, it causes job destruction in the non-oil industry.
  • Price credit and price risk simulation for Alaska natural gas pipleline project

    Cao, Yue (2003-05)
    This work describes the price risk involved in developing an Alaska Natural Gas Pipeline. Three alternatives were developed. They are an ALCAN Only 4.5 Bcf/day case, a Y-line case, and an ALCAN Only 5.5 Bcf/day case. The simulation result supports the conclusion that the ALCAN Only 4.5 Bcf/day case would be the most feasible and flexible choice for the long-run gas development with less commodity risk. Also, the price credit simulation was run based on the EIA natural gas price forecast. It shows how a Federal Tax Credit helps to reduce price risk making this marginal project more acceptable for participating oil companies. However it might not be revenue neutral for the Federal Government. The risk-assessment model was constructed in the Excel spreadsheet with a commercially purchased add-in feature (@RISK by Palisade Corp.) that performed the Monte Carlo simulation and the probabilistic outcomes. It was designed to be a dynamic tool that could estimate production performance with associated costs, and product prices to Yield an economic analysis. The model was specifically designed for the Alaska Natural Gas Pipeline. This work could be useful for government, companies, and any individual, who is currently involved with the Alaska Natural Gas Act.
  • A statistical analysis of Alaskan oil and natural gas lease bids

    Russell, Sara Lynn (2002-05)
    This study statistically analyzes the behavior of oil and gas lease bidders in Alaska using pooled cross-sectional time series data from 1959 to 1998. The two players associated with this data set are the corporate or major players and the independent or non-major players. The behavior of each group is statistically distinct. Majors maximize profit by exploiting oil and gas; non-majors maximize profit by reselling the leases. The effect of joint bidding is also investigated. The consequence of ownership of the Trans Alaska Pipeline System or TAPS is also considered (all owners of the TAPS are major firms). The findings intimate that owners have a distinct advantage over non-owners. Owners bid significantly higher. Another aspect of the pipeline is the tariff associated with the TAPS. While North Slope sales are more profitable than other sales, the tariff combined with diminishing productivity of leases results in fewer bidders for northern sales.
  • Examination of US college textbook prices

    Molina, Allen Christopher; Baek, Jungho; Wright, Christopher; Little, Joseph (2015-08)
    College textbook prices are investigated in detail using an Auto-Regressive Distributed Lag (ARDL) approach to cointegration. This technique allows for the examination of short and Long run affects to prices brought upon by changes in personal income, college enrollment, input Prices and changes in corporate profit. The 2008 economic downturn and the introduction of the 2008 Higher Education Opportunity Act have also been included in this analysis as factors Affecting price. The results of my analysis show that supply factors are stronger determinants in The long run changes of textbook prices, while in the short run, both supply and demand factors Are determinants of textbook prices. Both 2008 market shocks also were found to have negative Effects on prices in the college textbook market.
  • An economic analysis of the market for Alaska wild salmon protein concentrate in China

    Xu, Pei (2004-08)
    The Alaska wild salmon industry has been in economic turmoil for many years. Plagued by increased production of farmed salmon, wholesale and ex-vessel prices for nearly all Alaska wild salmon species and products are at all time lows. The incentive to harvest the flesh of the lower-valued wild salmon species, such as the Alaskan pink and chum salmon, have led to discard problems. There are no seafood products currently made from the late season roe-stripped carcasses and the meat cannot be readily sold due to its perceived poor quality. The fishers and the processors are now faced with a problem of selling wild salmon products of little economic value. This study reports on an effort to investigate a potential Chinese market for Alaskan salmon protein concentrate (a powder product derived from Alaskan wild pink and Chum salmon). Personal surveys of Chinese consumers were conducted in five Chinese cities (Beijing, Tianjin, Baoding, Shijianzhuang, and Wangdu) to determine if this newly developed product would be valued by Chinese consumers. The relative important characteristics of wild salmon protein concentrate made from pink and chum salmon are compared to the existing protein concentrate consumed in China, made from Chinese grass carp, utilizing conjoint analyses.
  • An econometric analysis of global salmon market prices and its implications for the Alaska wild salmon industry

    Holzinger, Abby C. (2007-05)
    The Alaska wild salmon industry has gone through a period of low prices and changing markets in the past two decades. Average exvessel prices have dropped from $1.46 per pound in 1988 to $0.35 per pound in 2005, due in large part to increased volume of farmed salmon and marine-reared rainbow trout. This thesis examines the potential price and revenue effects from the interaction between wild Alaskan salmon and anticipated production increases of farmed salmon from Chile. To investigate these linkages I developed an international simultaneous equilibrium market model for wild and farmed salmon and marine-reared rainbow trout. While world-wide farmed salmon (and trout) and the various wild Alaskan salmon species are not identical products, they are close substitutes. Changes in the volume of aquaculture production substantially affect the market-clearing prices of wild salmon. This model will then be used to simulate potential changes in Chilean farmed salmon production and Alaska wild salmon production on salmon exvessel prices in Alaska.
  • Species-specific time series analysis of the impact of Alaska policy decisions on salmon harvest yields

    Benshoof, Christopher Wayne; Little, Joseph; Baek, Jungho; Goering, Greg (2014-05)
    Throughout Alaska's history, the volume of the yearly salmon harvest has been an issue of much debate. As early as the 1940s and 1950s, decreasing salmon harvests caused territorial leaders to push for Alaska statehood such that the resources could be governed by the people that lived there. Since then, various policy shifts in both 1959 and 1.974 have been credited with supporting higher and higher salmon yields. This thesis incorporates historical data from 1914-2013 for salmon harvests of Chinook, sockeye, coho, pink, and chum salmon along with environmental factors associated with the Pacific decadal oscillation (PDO) index to investigate the role that policy decisions in Alaska's history have played in the salmon industry. This cointegration relationship is studied using an autoregressive distributed lag (ARDL) bounds testing approach to create statistical models of the time series data for each of the five salmon species. Results for both short-run and long-run impacts are analyzed for each species as well as the salmon market as a whole. The conclusions show that while there is a long-run cointegration relationship between oceanic conditions and Alaska salmon harvest, the policy changes in 1959 had no statistically significant impact on long-run salmon yield. In addition, the changes in 1974 including the Limited Entry Act and bolstered support for salmon hatcheries did have a strongly significant affect on the volume of salmon harvests. The ARDL models presented here offer a new look at historical Alaska policy while taking into account the interconnectedness of the market with the environment.
  • The Political Economy of Corporate Social Responsibility and Community Development: A Case Study of Norway's Snøhvit Natural Gas Complex

    Klick, Matthew Thornton; Valcic, Branka; Rosenberg, Jonathan; Haley, Sharman (2008)
    This project uses stakeholder evidence from semi-structured interviews to analyze the relative effectiveness of an oil company’s stated “corporate social responsibility” (CSR) initiatives in a new, Arctic host community. Specifically, this project analyzes the outcomes of StatoilHydro initiatives to date in Hammerfest, Norway, where the Snøhvit (Snow White) natural gas project began production in 2007. It gauges the ability of “socially responsible” approaches to development to internalize negative externalities and promote positive “spin-offs.” Arctic countries are increasingly prioritizing petroleum development. The convergence of dramatic climate change, increasing energy demands, and high energy prices has made the Arctic an alluring frontier for the oil industry and Arctic governments. Small Arctic communities are increasingly playing host to large energy projects with the potential for dramatic cultural, social, environmental, and economic upheaval, but also economic growth and increased human capital. In this case study, CSR initiatives resulted in a broader accounting of social costs and benefits, an outcome that better internalized externalities, and pareto-improving trades between stakeholders and industry.