Carbon Emission Performance of Independent Oil and Natural Gas Producers in the United States

Abstract

The oil and natural gas producers have undergone a lot of pressures to curb their carbon emissions as part of the global efforts to address the climate change problem. This paper aims to examine the carbon emission performance of a set of independent oil and natural gas producers in the United States for the period 2011–2015. For each producer, we manually collect its drilling, oil production and gas production data from the annual reports, and extract the carbon emissions data from the EPA’s Greenhouse Gas Reporting Program (GHGRP). We develop empirical models based on the data envelopment analysis (DEA) approach and the Malmquist index measurement. The proposed DEA models generate unified efficiency scores to capture the carbon emission performance under natural disposability and managerial disposability respectively. Then the DEA-based Malmquist indexes are derived to measure the change of carbon emission performance over time. We are able to identify climate leaders and laggards among the producers. Furthermore, we find that the performance has improved from 2012 to 2015 under natural disposability. Under managerial disposability, the indexes exhibit significantly greater dispersions than the indexes under natural disposability, and there is an industry-wide loss of efficiency in terms of technical change. The sustainable development of the independent oil and gas producers requires them to invest more in emission mitigation measures, such as energy conservation, leak detection and repair, flaring reduction, and even renewable energy.