Movers and shakers: stock market response to induced seismicity in oil and gas business

Matthijs Jan Kallen; Bert Scholtens

doi:10.3390/en14238051

Movers and shakers: stock market response to induced seismicity in oil and gas business

Matthijs Jan Kallen, Bert Scholtens^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.

Original language	English
Article number	e8051
Journal	Energies
Volume	14
Issue number	23
Early online date	1 Dec 2021
DOIs	https://doi.org/10.3390/en14238051
Publication status	E-pub ahead of print - 1 Dec 2021

Keywords

Induced seismicity
Oil and gas majors
Financial value
Stock market
Event study

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10.3390/en14238051Licence: CC BY

Kallen_2021_Energies_Movers-shakers_CC
Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/4.0/
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Shakers and movers: Stock market response to induced seismicity in oil and gas business
Scholtens, L. J. R. (Contributor), DataverseNL, 1 Jan 2021
DOI: 10.34894/qwq8sn
Dataset

Cite this

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abstract = "Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants{\textquoteright} response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.",

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AU - Scholtens, Bert

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Y1 - 2021/12/1

N2 - Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.

AB - Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.

KW - Induced seismicity

KW - Oil and gas majors

KW - Financial value

KW - Stock market

KW - Event study

U2 - 10.3390/en14238051

DO - 10.3390/en14238051

M3 - Article

SN - 1996-1073

VL - 14

JO - Energies

JF - Energies

IS - 23

M1 - e8051

ER -

Movers and shakers: stock market response to induced seismicity in oil and gas business

Abstract

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Shakers and movers: Stock market response to induced seismicity in oil and gas business

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