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Technological Advancement and the Recovery of Natural Gas: The Value of Information


  • Janie M. Chermak
  • Robert H. Patrick


Accurate information on geology, petroleum engineering, and economics is essential for firms to make efficient decisions concerning if and, if so, how to produce natural gas wells. Improved information may not only help insure that wells are economic, but may also lead to reduced costs of production and an increased physically recoverable stock of the resource. This paper empirically applies the economic theory of exhaustible resources (extended to include necessary reservoir engineering) to evaluate the benefits obtainable from using an enhanced information technology developed by the Gas Research Institute. The wells analyzed indicate significant benefits are obtainable with appropriate use of the new technology. The magnitudes of these benefits vary across reservoir characteristics.

Suggested Citation

  • Janie M. Chermak & Robert H. Patrick, 1995. "Technological Advancement and the Recovery of Natural Gas: The Value of Information," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 113-135.
  • Handle: RePEc:aen:journl:1995v16-01-a07

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    References listed on IDEAS

    1. Fama, Eugene F & French, Kenneth R, 1988. " Business Cycles and the Behavior of Metals Prices," Journal of Finance, American Finance Association, vol. 43(5), pages 1075-1093, December.
    2. Lester G. Telser, 1958. "Futures Trading and the Storage of Cotton and Wheat," Journal of Political Economy, University of Chicago Press, vol. 66, pages 233-233.
    3. French, Kenneth R, 1986. "Detecting Spot Price Forecasts in Futures Prices," The Journal of Business, University of Chicago Press, vol. 59(2), pages 39-54, April.
    4. Fama, Eugene F., 1984. "Forward and spot exchange rates," Journal of Monetary Economics, Elsevier, vol. 14(3), pages 319-338, November.
    5. Serletis, Apostolos, 1991. "Rational expectations, risk and efficiency in energy futures markets," Energy Economics, Elsevier, vol. 13(2), pages 111-115, April.
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    Cited by:

    1. Fitzgerald, Timothy, 2015. "Experiential Gains with a New Technology: An Empirical Investigation of Hydraulic Fracturing," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(2), August.
    2. Chermak, Janie M. & Crafton, James & Norquist, Suzanne M. & Patrick, Robert H., 1999. "A hybrid economic-engineering model for natural gas production," Energy Economics, Elsevier, vol. 21(1), pages 67-94, February.

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    JEL classification:

    • F0 - International Economics - - General


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