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Unconventional gas: the economic theory is challenged

Author

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  • Oana Ionescu

    (G2ELab - Laboratoire de Génie Electrique de Grenoble - UJF - Université Joseph Fourier - Grenoble 1 - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INPG - Institut National Polytechnique de Grenoble - CNRS - Centre National de la Recherche Scientifique, équipe EDDEN - PACTE - Pacte, Laboratoire de sciences sociales - UPMF - Université Pierre Mendès France - Grenoble 2 - UJF - Université Joseph Fourier - Grenoble 1 - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique)

  • Ivan Pearson

    (IET - JRC Institute for Energy and Transport - JRC - European Commission - Joint Research Centre [Petten])

Abstract

This article aims at proposing new ways in which economic analysis can be applied to important issues related to security of energy supply. More particularly, we show how the real options theory may be a convenient tool to analyze the uncertainties surrounding the development of unconventional gas. We lay emphasis on the main economic features related to investment in this highly sophisticated technology which may contribute to address the needs of a world increasingly hungry for energy.

Suggested Citation

  • Oana Ionescu & Ivan Pearson, 2013. "Unconventional gas: the economic theory is challenged," Post-Print halshs-00942335, HAL.
    • Handle: RePEc:hal:journl:halshs-00942335
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00942335
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    References listed on IDEAS

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    1. Lin, Tyrone T. & Ko, Chuan-Chuan & Yeh, Hsin-Ni, 2007. "Applying real options in investment decisions relating to environmental pollution," Energy Policy, Elsevier, vol. 35(4), pages 2426-2432, April.
    2. Lucas Bretschger & Sjak Smulders, 2007. "Sustainable Resource Use and Economic Dynamics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(1), pages 1-13, January.
    3. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
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