The tug-of-war between resource depletion and technological change in the global oil industry 1981 - 2009

Lars Lindholt ()
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Lars Lindholt: Statistics Norway, https://www.ssb.no/en/forskning/ansatte

Discussion Papers from Statistics Norway, Research Department

Abstract: We perform an empirical analysis of the extent to which ongoing technological change through R&D activity has offset the effect of ongoing depletion on the cost of finding additional reserves of oil in eight global regions. We introduce a finding cost function that among other factors depends on the cumulative number of past R&D expenses and cumulative past production, measuring technological change and depletion, respectively. For all our regions we find significant effects of both depletion and technological change on oil finding costs from 1981 to 2009, barring cyclical variations in finding costs that could come from changes in factor prices. For almost all regions technology more than mitigated depletion until around the mid-nineties. However, we find that depletion outweighed technological progress over the last decade.

Keywords: Oil; depletion; technological change; R&D; finding costs (search for similar items in EconPapers)
JEL-codes: L71 Q31 (search for similar items in EconPapers)
Date: 2013-01
New Economics Papers: this item is included in nep-ene and nep-ino
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Citations: View citations in EconPapers (4)

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