Learning Curve, Change in Industrial Environment, and Dynamics of Production Activities in Unconventional Energy Resources
Jong-Hyun Kim () and
Yong-Gil Lee ()
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Jong-Hyun Kim: Department of Energy Resources Engineering, Inha University, 100 Inharo, Nam-gu, Incheon 22212, Korea
Yong-Gil Lee: Department of Energy Resources Engineering, Inha University, 100 Inharo, Nam-gu, Incheon 22212, Korea
Sustainability, 2018, vol. 10, issue 9, 1-11
Since 2007, shale oil and gas production in the United States has become a significant portion of the global fossil fuel market. The main cause for the increase in production of shale oil and gas in the US is the adoption of new production technologies, namely, horizontal drilling and hydraulic fracturing. However, the production cost of shale oil and gas in the US is comparably higher than the production cost of conventional oil and gas. In 2014, the crude oil and natural gas price decreased significantly to approximately 40 dollars per barrel, and natural gas prices decreased to 3 dollars per million British thermal unit, and thus the productivity and financial conditions for the exploration and production of shale oil and natural gas for producers in the United States have worsened critically. Therefore, technological innovation has become one of the most interesting issues of the energy industry. The present study analyzes the trends in technological innovation having a relationship with production activities. This study calculates the learning rate of 30 companies from the petroleum exploration and production industry in the United States using an improved learning rate calculation formula that reflects the changes in the oil production ratio. Thus, more statistically confident calculation results and interpretations of strategic production activities with regard to changes in the industrial environment were achieved in this study.
Keywords: learning rate; shale gas; tight oil; unconventional; petroleum; exploration and producing company; upstream industry; technological development (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:9:p:3322-:d:170419
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