Fragmented Ownership and Natural Resource Use: Evidence from the Bakken

Does land fragmentation impair spatially expansive natural resource use? We conduct empirical tests using ownership variation on the Bakken, one of the world's most valuable shale oil reserves. Long before shale was discovered, US policies created a mosaic of private, jointly owned and tribal government parcels on the Fort Berthold Indian Reservation. We find that all three forms of fragmentation reduced production during the 2010-15 oil boom, especially joint ownership and the interspersion of small parcels of government and private land. We estimate implied gains from consolidation and discuss implications for the use (or conservation) of other spatially expansive resources.