Hotelling under Pressure

• 成果类型: Article
• 署名作者: Anderson, Soren T.; Kellogg, Ryan; Salant, Stephen W.
• 署名单位: Michigan State University; National Bureau of Economic Research; University of Chicago; University System of Maryland; University of Maryland College Park; Resources for the Future
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/697203
• 发表日期: 2018
• 页码: 984-1026
• 关键词: NATURAL-RESOURCE SCARCITY; MODELING PEAK OIL; exhaustible resources; PETROLEUM RESERVES; MINERAL DEPLETION; ECONOMICS; prices; extraction; futures; demand

摘要

We show that oil production from existing wells in Texas does not respond to oil prices, while drilling activity and costs respond strongly. To explain these facts, we reformulate Hotelling's classic model of exhaustible resource extraction as a drilling problem: firms choose when to drill, but production from existing wells is constrained by reservoir pressure, which decays as oil is extracted. The model implies a modified Hotelling rule for drilling revenues net of costs, explains why the production constraint typically binds, and rationalizes regional production peaks and observed patterns of prices, drilling, and production following demand and supply shocks.