Barril, Diego and Navajas, Fernando H. (2011): What drove down natural gas production in Argentina?
Download (201Kb) | Preview
We address the causes behind the drop in natural gas production in Argentina since 2004, starting from a basic supply model that depends on economic incentives, and adding control variables related to different potential explanations such as firm specific (or area specific) behavior and the absence of contractual renegotiation of concessions extensions. Results from a panel of the change in natural gas production in all areas between 2004 and 2009 show that once a basic supply-past production (or reserve) relationship is modeled, other often mentioned effects become non-significant. Chiefly among them are firm specific effects and the role of renegotiations of concessions extensions. We find preliminary evidence that post 2007 renegotiations –which are associated with better price prospects- may have had an impact in correcting production decline in one leader firm. Other significant effects come from a negative impact of a change in the seasonality of production that in turn can be related to demand rationing and to price controls. Overall, the evidence suggests that the observed downcycle conforms to the prediction of a simple model of depressed economic incentives acting upon mature conventional natural gas fields and hindering investment in reserve additions or new technologies.
|Item Type:||MPRA Paper|
|Original Title:||What drove down natural gas production in Argentina?|
|English Title:||What drove down natural gas production in Argentina?|
|Keywords:||Natural gas, peak production,supply behaviour|
|Subjects:||Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy
|Depositing User:||Fernando H. Navajas|
|Date Deposited:||05. Jan 2012 00:44|
|Last Modified:||13. Feb 2013 10:38|
Cont W. and F. Navajas (2004),”La anatomía simple de la crisis energética argentina”, Documento de Trabajo Nº , FIEL, Buenos Aires.
Cont W., P. Hancevic and F. Navajas (2009), “Energy populism and household welfare”, XLIV annual meeting Argentine Association of Political Economy; http://www.aaep.org.ar/anales/works/works2009/cont_hancevic_navajas.pdf
Dasgupta P. and G. Heal (1979), Economic theory and exhaustible resources, Cambridge: Cambridge University Press.
FIEL (2007,2008, 2009), FIEL Energy Economics Report. Argentina, FIEL, Buenos Aires.
Krautkraemer J. (1998), “Nonrenewable resource scarcity”, Journal of Economic Literature, 34, 4, pp.831-42.
Krautkraemer J. and M. Toman (2003), “Fundamental economics of depletable energy supply”, Discussionpaper 03-01, Resources for the Future, Washington D.C.
Medlock K. (2009), “The economics of energy supply”, Chapter 3 in Evans J. and L. Hunt (eds.), International handbook on the economics of energy, Cheltenham UK: Edgar Elgar.
Navajas F. (2006), “Energo-crunch argentino 2002-20XX”, Documento de Trabajo Nº , FIEL, Buenos Aires.
Navajas F. (2010), “Energía e infraestructura en la Argentina: diagnóstico, desafíos y opciones”, Documento de Trabajo Nº105, FIEL.
Pickering A. (2008), “The oil reserves production relationship”, Energy Economics, 30, pp.352-70.
Wells M. (1992), “Modeling and forecasting the supply of oil and gas: A survey of existing approaches”, Resources and Energy, 14, pp.287-309.
World Bank (1990), Argentina Energy Sector Study, Report No. 7993-AR, February.