IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i17p3331-d262057.html
   My bibliography  Save this article

Shale-Oil Development Prospects: The Role of Shale-Gas in Developing Shale-Oil

Author

Listed:
  • Douglas B. Reynolds

    (School of Management, University of Alaska Fairbanks, Fairbanks, AK 99775-6080, USA)

  • Maduabuchi Pascal Umekwe

    (School of Management, University of Alaska Fairbanks, Fairbanks, AK 99775-6080, USA)

Abstract

Currently, most of the world’s shale-oil is coming from the United States, but more may be needed from non-U.S. sources in order to keep the world price of oil from increasing, and yet a number of petroleum producing countries have yet to develop shale-oil resources. This article investigates why that may be. One reason for this may be the role that shale-gas development plays in the search for shale-oil. In the oil and natural gas industry over much of the 20th century, finding oil has usually been more valuable than finding natural gas because the gas has less energy density than oil, making each BTU (or Joule) of oil energy easier to store, transport and use for consumers. However, since shale source-rock often has both natural gas and oil, then it behooves a shale search process to start by looking for natural gas first rather than oil to enhance the profitability of the search process. The problem, then, is that a shale-oil only search strategy has the same problem that first plagued the oil and gas industry: What do you do with the natural gas? In this paper, we will examine how this “chicken and egg” exploration scenario has played out in the U.S. in order to draw lessons on how difficult shale-oil development will be for the rest of the world.

Suggested Citation

  • Douglas B. Reynolds & Maduabuchi Pascal Umekwe, 2019. "Shale-Oil Development Prospects: The Role of Shale-Gas in Developing Shale-Oil," Energies, MDPI, vol. 12(17), pages 1-21, August.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:17:p:3331-:d:262057
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/17/3331/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/17/3331/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Reynolds, Douglas B., 1999. "The mineral economy: how prices and costs can falsely signal decreasing scarcity," Ecological Economics, Elsevier, vol. 31(1), pages 155-166, October.
    2. Smil, Vaclav, 2013. "Made in the USA," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262019388, December.
    3. Bardi, Ugo, 2005. "The mineral economy: a model for the shape of oil production curves," Energy Policy, Elsevier, vol. 33(1), pages 53-61, January.
    4. Hamilton, James D, 1983. "Oil and the Macroeconomy since World War II," Journal of Political Economy, University of Chicago Press, vol. 91(2), pages 228-248, April.
    5. Lynch, Michael C., 2002. "Forecasting oil supply: theory and practice," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 373-389.
    6. Jakobsson, Kristofer & Söderbergh, Bengt & Snowden, Simon & Li, Chuan-Zhong & Aleklett, Kjell, 2012. "Oil exploration and perceptions of scarcity: The fallacy of early success," Energy Economics, Elsevier, vol. 34(4), pages 1226-1233.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Drachal, Krzysztof, 2021. "Forecasting selected energy commodities prices with Bayesian dynamic finite mixtures," Energy Economics, Elsevier, vol. 99(C).
    2. Delannoy, Louis & Longaretti, Pierre-Yves & Murphy, David J. & Prados, Emmanuel, 2021. "Peak oil and the low-carbon energy transition: A net-energy perspective," Applied Energy, Elsevier, vol. 304(C).
    3. Dipen Paul & Sushant Malik & Dharmesh K. Mishra & Rushik Hiwale, 2021. "Shale Gas: An Indian Market Perspective," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 126-136.
    4. Jong-Hyun Kim & Yong-Gil Lee, 2020. "Progress of Technological Innovation of the United States’ Shale Petroleum Industry Based on Patent Data Association Rules," Sustainability, MDPI, vol. 12(16), pages 1-17, August.
    5. Xiaomeng Cao & Yuan Gao & Jingwei Cui & Shuangbiao Han & Lei Kang & Sha Song & Chengshan Wang, 2020. "Pore Characteristics of Lacustrine Shale Oil Reservoir in the Cretaceous Qingshankou Formation of the Songliao Basin, NE China," Energies, MDPI, vol. 13(8), pages 1-25, April.
    6. Heting Gao & Xinping Zhou & Zhigang Wen & Wen Guo & Weichao Tian & Shixiang Li & Yunpeng Fan & Yushu Luo, 2022. "Classification and Evaluation of Shale Oil Reservoirs of the Chang 7 1-2 Sub-Member in the Longdong Area," Energies, MDPI, vol. 15(15), pages 1-18, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Douglas B. Reynolds, 2024. "U.S. shale oil production and trend estimation: Forecasting a Hubbert model," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 468-487, January.
    2. Reynolds, Douglas B., 2013. "Uncertainty in exhaustible natural resource economics: The irreversible sunk costs of Hotelling," Resources Policy, Elsevier, vol. 38(4), pages 532-541.
    3. Reynolds, Douglas B., 2014. "World oil production trend: Comparing Hubbert multi-cycle curves," Ecological Economics, Elsevier, vol. 98(C), pages 62-71.
    4. Jakobsson, Kristofer & Söderbergh, Bengt & Höök, Mikael & Aleklett, Kjell, 2009. "How reasonable are oil production scenarios from public agencies?," Energy Policy, Elsevier, vol. 37(11), pages 4809-4818, November.
    5. Douglas B. Reynolds & Marek Kolodziej, 2009. "North American Natural Gas Supply Forecast: The Hubbert Method Including the Effects of Institutions," Energies, MDPI, vol. 2(2), pages 1-38, May.
    6. Reynolds, Douglas B. & Baek, Jungho, 2012. "Much ado about Hotelling: Beware the ides of Hubbert," Energy Economics, Elsevier, vol. 34(1), pages 162-170.
    7. Brandt, Adam R., 2010. "Review of mathematical models of future oil supply: Historical overview and synthesizing critique," Energy, Elsevier, vol. 35(9), pages 3958-3974.
    8. Ugo Bardi & Alessandro Lavacchi, 2009. "A Simple Interpretation of Hubbert’s Model of Resource Exploitation," Energies, MDPI, vol. 2(3), pages 1-16, August.
    9. Smith, James L., 2012. "On the portents of peak oil (and other indicators of resource scarcity)," Energy Policy, Elsevier, vol. 44(C), pages 68-78.
    10. Antonio RIBBA, 2010. "Sources of Unemployment Fluctuations in the USA and in the Euro Area in the Last Decade," EcoMod2010 259600141, EcoMod.
    11. Dong, Minyi & Chang, Chun-Ping & Gong, Qiang & Chu, Yin, 2019. "Revisiting global economic activity and crude oil prices: A wavelet analysis," Economic Modelling, Elsevier, vol. 78(C), pages 134-149.
    12. Robert K. Kaufmann, 2014. "The End of Cheap Oil: Economic, Social, and Political Change in the US and Former Soviet Union," Energies, MDPI, vol. 7(10), pages 1-17, September.
    13. Brandt, Adam R., 2007. "Testing Hubbert," Energy Policy, Elsevier, vol. 35(5), pages 3074-3088, May.
    14. Reynolds, Douglas B. & Pippenger, Michael K., 2010. "OPEC and Venezuelan oil production: Evidence against a cartel hypothesis," Energy Policy, Elsevier, vol. 38(10), pages 6045-6055, October.
    15. Jakobsson, Kristofer & Söderbergh, Bengt & Snowden, Simon & Li, Chuan-Zhong & Aleklett, Kjell, 2012. "Oil exploration and perceptions of scarcity: The fallacy of early success," Energy Economics, Elsevier, vol. 34(4), pages 1226-1233.
    16. Johannes Mauritzen, 2017. "The Effect of Oil Prices on Field Production: Evidence from the Norwegian Continental Shelf," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(1), pages 124-144, February.
    17. repec:ipg:wpaper:2014-421 is not listed on IDEAS
    18. Robert J. Brecha, 2013. "Ten Reasons to Take Peak Oil Seriously," Sustainability, MDPI, vol. 5(2), pages 1-31, February.
    19. Joseph H. Davis & Christopher Hanes & Paul W. Rhode, 2009. "Harvests and Business Cycles in Nineteenth-Century America," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1675-1727.
    20. Antonella Cavallo & Antonio Ribba, 2017. "Measuring the Effects of Oil Price and Euro-area Shocks on CEECs Business Cycles," Department of Economics 0111, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    21. Lee, Chi-Chuan & Lee, Chien-Chiang & Ning, Shao-Lin, 2017. "Dynamic relationship of oil price shocks and country risks," Energy Economics, Elsevier, vol. 66(C), pages 571-581.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:17:p:3331-:d:262057. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.