Technology and Petroleum Exhaustion: Evidence from Two Mega-Oilfields
. In this paper we use results from the Hotelling model of non-renewable resources to examine the hypothesis that technology may increase petroleum reserves. We present empirical evidence from two well-documented mega-oilfields: the Forties in the North Sea and the Yates in West Texas. Patterns of depletion in these two fields suggest that when a resource is finite, technological improvements do increase supply temporarily. But in these two fields, the effect of new technology was to increase the rate of depletion without altering the fields' ultimate recovery - in line with Hotelling's predictions. Our results imply that temporary low prices may be misleading indicators of future resource scarcity and call into question the future ability of current mega-oilfields to meet a sharp increase in oil demand.
|Date of creation:||Dec 2005|
|Date of revision:||Apr 2006|
|Contact details of provider:|| Web page: http://www.economics.rpi.edu/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John M. Gowdy, 2003.
"The Revolution in Welfare Economics and its Implications for Environmental Valuation and Policy,"
Rensselaer Working Papers in Economics
0315, Rensselaer Polytechnic Institute, Department of Economics.
- John M. Gowdy, 2004. "The Revolution in Welfare Economics and Its Implications for Environmental Valuation and Policy," Land Economics, University of Wisconsin Press, vol. 80(2), pages 239-257.
- Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
- Hallock, John L. & Tharakan, Pradeep J. & Hall, Charles A.S. & Jefferson, Michael & Wu, Wei, 2004. "Forecasting the limits to the availability and diversity of global conventional oil supply," Energy, Elsevier, vol. 29(11), pages 1673-1696.
- Alcott, Blake, 2005. "Jevons' paradox," Ecological Economics, Elsevier, vol. 54(1), pages 9-21, July.
- Hanley, Nick & Shogren, Jason & White, Ben, 2013.
"Introduction to Environmental Economics,"
Oxford University Press,
edition 2, number 9780199568734, December.
- Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
- Anderson, Seth C & et al, 2001. "A Multifactor Analysis of Country Fund Returns," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 24(3), pages 331-346, Fall.
- Ernst Fehr & Urs Fischbacher, 2002. "Why Social Preferences Matter -- The Impact of Non-Selfish Motives on Competition, Cooperation and Incentives," Economic Journal, Royal Economic Society, vol. 112(478), pages 1-33, March.
- Norgaard, Richard B., 1990. "Economic indicators of resource scarcity: A critical essay," Journal of Environmental Economics and Management, Elsevier, vol. 19(1), pages 19-25, July.
When requesting a correction, please mention this item's handle: RePEc:rpi:rpiwpe:0512. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shawn Kantor)
If references are entirely missing, you can add them using this form.