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Understanding oil scarcity through drilling activity

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  • Bai, Yiyi
  • Okullo, Samuel J.

Abstract

There are two dimensions of scarcity for exhaustible resources: physical and economic. While there is a general consensus that oil has grown physically scarce overtime, it is less clear whether the same can be said of economic scarcity. We develop a procedure based on evaluating movements in both drilling trends and rents in order to draw more precise inference about economic availability of oil reserves. We apply this method to data on the US oil industry and demonstrate that US crude oil reserves grew economically more abundant between 1955 and 2002, despite increasing physical scarcity.

Suggested Citation

  • Bai, Yiyi & Okullo, Samuel J., 2018. "Understanding oil scarcity through drilling activity," Energy Economics, Elsevier, vol. 69(C), pages 261-269.
    • Handle: RePEc:eee:eneeco:v:69:y:2018:i:c:p:261-269
    DOI: 10.1016/j.eneco.2017.12.003
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    Cited by:

    1. Sofia Dahlgren & Jonas Ammenberg, 2021. "Sustainability Assessment of Public Transport, Part II—Applying a Multi-Criteria Assessment Method to Compare Different Bus Technologies," Sustainability, MDPI, Open Access Journal, vol. 13(3), pages 1-30, January.
    2. Inge van den Bijgaart & Mauricio Rodriguez, 2020. "Closing Wells; Fossil Exploration and Abandonment in the Energy Transition," CESifo Working Paper Series 8453, CESifo.
    3. van den Bijgaart, Inge & Rodriguez, Mauricio, 2020. "Closing wells; fossil exploration and abandonment in the energy transition," Working Papers in Economics 789, University of Gothenburg, Department of Economics.

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    More about this item

    Keywords

    Oil scarcity; Drilling; United States;
    All these keywords.

    JEL classification:

    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources

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