195 lines
6.1 KiB
TeX
195 lines
6.1 KiB
TeX
\begin{frame}{Chapter III}
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\huge
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\bf{Bitcoin Mining, the Next Shale Boom?}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\begin{frame}{Guiding Question}
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\Large
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How will bitcoin mining change oil production decisions in the United States?
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\large
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\vfill
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\onslide<2->{Basin and state fixed effect model of flared gas value. Structural vector autoregression (SVAR) model of oil production elasticity. Time series model of bitcoin mining energy use.}
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\begin{itemize}
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\onslide<3->{\item{Effect depends on location}}
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\onslide<4->{\item{Response is \emph{not sensitive} to bitcoin price}}
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\onslide<4->{\item{Response is sensitive to natural gas price}}
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\onslide<5->{\item{Up to a 0.55\% increase in oil production}}
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\onslide<6->{\item{Oil revenues could increase by 0.63\%}}
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\onslide<7->{\item{Global oil price would decline by 0.2\%}}
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\end{itemize}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\subsection{Background}
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\begin{frame}{Background: Bitcoin mining}
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\begin{columns}
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\begin{column}{0.5\textwidth}
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\begin{itemize}
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\onslide<2->{\item{Adds transactions to the block chain}}
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\onslide<2->{\item{Limited size in a block}}
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\onslide<3->{\item{Miner reward}}
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\onslide<3->{\item{User fees}}
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\onslide<4->{\item{Hash function}}
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\onslide<5->{\item{Difficultly adjustment}}
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\onslide<6->{\item{Application-specific integrated circuit (ASIC)}}
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\end{itemize}
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\end{column}
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\begin{column}{0.5\textwidth}
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\centering
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\includegraphics[width=\textwidth]{Chapter_III/figures/Cryptocurrency_Mining_Farm.jpg}
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\end{column}
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\end{columns}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\begin{frame}{Background: Flaring}
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\Large \textbf{Why is natural gas flared?}
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\large
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\begin{columns}
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\begin{column}{0.5\textwidth}
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\begin{itemize}
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\onslide<2->{\item{Natural gas is always produced with oil}}
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\onslide<3->{\item{Gas oil ratio (GOR)}}
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\onslide<4->{\item{Expensive pipelines required to move the gas}}
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\onslide<5->{\item{Flaring is cheaper in new or remote fields}}
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\end{itemize}
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\onslide<6->{Bitcoin miners have a mobile demand for low cost energy sources.}
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\end{column}
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\begin{column}{0.5\textwidth}
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\centering
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\only<1-5>{
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\includegraphics[width=\textwidth]{Chapter_III/figures/FALRING.png}
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North Dakota flared gas \citep{dalrympleNorthDakotaNatural2018}
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}
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\only<6>{ \includegraphics[width=\textwidth]{Chapter_III/figures/BTC_MINER_FLARED.png}
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Crusoe Energy Bitcoin miner \citep{robertson2021}
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}
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\end{column}
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\end{columns}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\subsection{Data}
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\begin{frame}{Data}
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\begin{columns}
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\begin{column}{0.33\textwidth}
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\textbf{Enverus}
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\begin{itemize}
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\item{Well location}
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\item{Well attributes}
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\item{Oil and gas production}
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\end{itemize}
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\end{column}
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\begin{column}{0.33\textwidth}
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\textbf{Bitcoin Data}
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\begin{itemize}
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\item{Block difficulty}
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\item{Blocks added}
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\item{Bitcoin price}
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\end{itemize}
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\end{column}
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\begin{column}{0.33\textwidth}
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\textbf{Other Data}
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\begin{itemize}
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\item{Oil price}
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\item{Natural gas price}
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\item{Industrial index}
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\item{Temperature}
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\end{itemize}
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\end{column}
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\end{columns}
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\vfill
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Volume of oil and gas produced by a well is discounted to the date it was drilled \citep{anderson2018}.
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\subsection{Econometrics}
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\begin{frame}{Econometrics}
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\Large Three econometric results.
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\large
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\begin{enumerate}
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\onslide<1->{\item{Structural vector autoregression: Elasticity of oil production}}
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\onslide<2->{\item{Fixed effect model of flared gas: Total subsidy from selling flared gas}}
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\onslide<3->{\item{Nonlinear Cointegrating Autoregressive Distributed Lag Mode (NARDL): Effect of bitcoin price shocks}}
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\end{enumerate}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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\subsection{Structural vector autoregression}
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\begin{frame}{Information flow in oil markets}
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\begin{figure}
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\includegraphics[width=\textwidth]{Chapter_III/figures/timeline.png}
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\end{figure}
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\onslide<2->{Restriction that drilling rates do not respond to price shocks within the same month \citep{kilian2009}. It takes time to acquire drilling rig contracts, licenses, and create engineering plans}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%
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\begin{frame}{A matrix restrictions of the SVAR model}
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\small
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\begin{equation*}
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\begin{pmatrix}
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e^{\Delta BTU}_t\\
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e^{\Delta \theta}_t\\
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e^{\Delta D_{i}}_t\\
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e^{\Delta P_{g}}_t\\
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e^{\Delta P_{o}}_t
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\end{pmatrix}=
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\begin{bmatrix}
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1 & 0 & 0 & 0 & 0 \\
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0 & 1 & 0 & 0 & 0 \\
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a_{3,1} & a_{3,2} & 1 & 0 & 0 \\
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a_{4,1} & a_{4,2} & a_{4,3} & 1 & 0 \\
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a_{5,1} & a_{5,2} & a_{5,1} & a_{5,1} & 1 \\
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\end{bmatrix}
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\begin{pmatrix}
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\epsilon_{q}\\
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\epsilon_{\theta}\\
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\epsilon_{D_{i}}\\
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\epsilon_{g}\\
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\epsilon_{o}
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\end{pmatrix}
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\begin{matrix}
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\text{Joint Supply Shock}\\
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\text{Composition Shock}\\
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\text{Industrial Demand Shock}\\
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\text{Gas Specific Demand Shock}\\
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\text{Oil Specific Demand Shock}\\
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\end{matrix}
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\end{equation*}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%
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\begin{frame}{Key impulse response from industrial shock}
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\begin{columns}
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\begin{column}{0.45\textwidth}
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\small
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\includegraphics[width=\textwidth]{Chapter_III/figures/IRF_BTU.pdf}
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IRF on energy production
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\includegraphics[width=\textwidth]{Chapter_III/figures/IRF_IND}
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IRF on industrial demand
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\end{column}
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\begin{column}{0.45\textwidth}
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\small
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\includegraphics[width=\textwidth]{Chapter_III/figures/IRF_WTI}
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IRF on oil price
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\includegraphics[width=\textwidth]{Chapter_III/figures/IRF_HH}
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IRF on natural gas price
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\end{column}
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\end{columns}
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\end{frame}
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%%%%%%%%%%%%%%%%%%%%
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\begin{frame}{Elasticity estimate}
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\onslide<1->{\begin{equation*}
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Elasticity_{S}=\sum_{t=0}^{t}\left(\frac{\Delta \theta_{t} \cdot \Delta q_{t}}{\Delta P_{oil,t}}\right)
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\end{equation*}
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}
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\newline
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\onslide<2>{\begin{equation*}
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0.55=\sum_{t=0}^{120}\left(\frac{\Delta \theta_{t} \cdot \Delta q_{t}}{\Delta P_{oil,t}}\right)
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\end{equation*}}
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\end{frame}
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\begin{frame}[plain]
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\huge
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Conclusion
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\end{frame}
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