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Medientyp:
E-Artikel
Titel:
Supply flexibility in the shale patch: Evidence from North Dakota
Beteiligte:
Bjørnland, Hilde C.;
Nordvik, Frode Martin;
Rohrer, Maximilian
Erschienen:
Wiley, 2021
Erschienen in:
Journal of Applied Econometrics, 36 (2021) 3, Seite 273-292
Sprache:
Englisch
DOI:
10.1002/jae.2808
ISSN:
0883-7252;
1099-1255
Entstehung:
Anmerkungen:
Beschreibung:
SummaryThis paper provides new results to the literature, showing that output flexibility in oil production depends on the extraction technology. In particular, constructing a novel well‐level monthly production dataset covering more than 16,000 crude oil wells in North Dakota, we find supply elasticity of shale wells to be positive and in the range of 0.3–0.9, depending on wells and firms characteristics. We find no such responses for conventional wells. We interpret the supply pattern of shale oil wells to be consistent with the Hotelling theory of optimal extraction. Reserves are an inventory, and the decision to produce is an intertemporal choice of when to draw down below‐ground inventory.