Petroleum Accessibility and Drilling Technology: An Analysis of U.S. Development Costs from 1959 to 1978

Natural resource scarcity and new technology have been joined during the last decade in the flourish of publications on intertemporal allocation. The model is used here to analyze well drilling costs during the period of rapid petroleum price escalation of the 1970s. The objective is to assess the i...

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Bibliographic Details
Published in:Land economics 1986-02, Vol.62 (1), p.14-25
Main Authors: Norgaard, Richard B., Leu, Gwo Jiun
Format: Article
Language:English
Subjects:
Cost efficiency
Cost estimates
Costs
Drilling
Drilling costs
Economic costs
Economic theory
Gas wells
Land economics
Mathematical models
Natural resources
Oil exploration
Oil wells
Petroleum
Regression analysis
Water wells
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Summary:Natural resource scarcity and new technology have been joined during the last decade in the flourish of publications on intertemporal allocation. The model is used here to analyze well drilling costs during the period of rapid petroleum price escalation of the 1970s. The objective is to assess the importance of the effect of technology and scarcity on costs using data from nonhomogeneous regions and taking into account the effects of other aggregate indicators. The results confirm the important influence of increased depth on cost, demonstrate that technological change has probably been significant, and suggest that the level of drilling activity and exploration success are related to well cost. Significant improvements in analysis will probably only come by including data on the distribution of wells drilled in new and old fields within each area.
ISSN:0023-7639
1543-8325
DOI:10.2307/3146559