Fracking and Structural Shifts in Oil Supply

W. Walls and Xiaoli Zheng

No 2020-01, Working Papers from Department of Economics, University of Calgary

Abstract: The adoption of hydraulic fracturing (fracking) and horizontal drilling technology substantively altered the structure of oil supply. Using disaggregate state-level data from the U.S, this paper provides empirical evidence that oil supplies are now asymmetric with respect to price changes as a result of the adoption of new production methods. The changed structure of U.S. oil supply---particularly the low supply elasticities for price declines and large supply elasticities for price increases---is consistent with the ineffectiveness of OPEC policies intended to drown fracking American producers in oil.

Keywords: Fracking; Oil Supply; OPEC (search for similar items in EconPapers)
JEL-codes: L13 L71 Q35 Q41 (search for similar items in EconPapers)
Date: 2020-06-30
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Journal Article: Fracking and Structural Shifts in Oil Supply (2022)
Journal Article: Fracking and Structural Shifts in Oil Supply (2022)
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