The Marginal Oil Field

Benini, Giacomo and Brandt, Adam and Dotti, Valerio and El-Houjeiri, Hassan (2020): The Marginal Oil Field.

Abstract

The recent diffusion of novel oil technologies has increased the variability of petroleum resources. Today, it is possible to mine oil sands, to extract liquids from tight rocks and to produce high-viscosity oils. Using the Rystad dataset, we examine the sensitivity of 14343 deposits to a marginal change in oil prices or in marginal extraction costs. According to our estimates the variations in the crude properties combined with the value combined with the differences in the marginal extraction costs shift the (median) value of an extra barrel from $29.00 to $64.63 depending upon the type of oil. The range between these two extremes suggests that different oils could respond differently to common as well as specific shocks. Our findings are relevant for the design of Pigouvian taxes affecting the oil sector.

• Item Type: MPRA Paper
• Language: English
• Keywords: Oil Economics, Shadow-Prices, Empirical Analysis of Firm Behaviour, Panel Data, Linear Mixed Models.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; D - Microeconomics > D2 - Production and Organizations > D22 - Firm Behavior: Empirical Analysis; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q35 - Hydrocarbon Resources

References

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