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

Author

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  • Janie M. Chermak
  • Robert H. Patrick

Abstract

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, , vol. 16(1), pages 113-135, January.
    • Handle: RePEc:sae:enejou:v:16:y:1995:i:1:p:113-135
    DOI: 10.5547/ISSN0195-6574-EJ-Vol16-No1-7
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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, Cambridge University Press, vol. 44(2), pages 83-105, 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.

    More about this item

    Keywords

    Natural gas production; US; Natural gas wells; technology change; reservoir properties;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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