Private Versus Government Ownership of Natural Resources: Evidence from the Bakken

Authors: Dominic Parker and Bryan Leonard

Status: Working Paper

Land ownership in the United States extends below ground, whereas most governments retain subsurface ownership. Which system generates greater resource use? We exploit a natural experiment to show the answer depends on land fragmentation. Historical policies created a mosaic of government, private, and co-owned parcels on the Ft. Berthold Indian reservation above the Bakken shale. Studying the 2005-2015 fracking boom, we find that private ownership generated more oil production than government ownership unless parcels were smaller than 5 acres (private) or 63 acres (co-owned). Scattered government holdings within private areas further reduced production. We estimate the implied gains from consolidation.


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