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Price Responsiveness of Shale Oil: A Bakken Case Study

We estimated oil supply from hydraulically fractured horizontal wells completed in North Dakota from March 2015 through May 2019. We modeled impacts on production of price, capital costs, technological progress, well-to-well interference, and location. Two models were developed: One considered produ...

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Detalles Bibliográficos
Autores principales: Vatter, Marc H., Van Vactor, Samuel A., Coburn, Timothy C.
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer US 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8785392/
http://dx.doi.org/10.1007/s11053-021-09972-9
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author Vatter, Marc H.
Van Vactor, Samuel A.
Coburn, Timothy C.
author_facet Vatter, Marc H.
Van Vactor, Samuel A.
Coburn, Timothy C.
author_sort Vatter, Marc H.
collection PubMed
description We estimated oil supply from hydraulically fractured horizontal wells completed in North Dakota from March 2015 through May 2019. We modeled impacts on production of price, capital costs, technological progress, well-to-well interference, and location. Two models were developed: One considered production to be a continuous stream (omitting gaps) and the other allowed that production may be discontinuous, with starts, shut-ins, and re-starts. Both gave estimates of price elasticity higher than that of non-OPEC oil supply in general. We confirmed the rapid decline rates from early peaks that characterize shale wells and demonstrated that, although various factors can shift production up or down, the decline rate remains consistent. Given this, and a much shorter development time, shale oil can be ramped up and down more quickly than conventional oil in North America today. Consequently, the price response of shale oil tends to dampen the long-term price cycle and moderate the price shocks that have plagued the market, and the macroeconomy.
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spelling pubmed-87853922022-01-25 Price Responsiveness of Shale Oil: A Bakken Case Study Vatter, Marc H. Van Vactor, Samuel A. Coburn, Timothy C. Nat Resour Res Original Paper We estimated oil supply from hydraulically fractured horizontal wells completed in North Dakota from March 2015 through May 2019. We modeled impacts on production of price, capital costs, technological progress, well-to-well interference, and location. Two models were developed: One considered production to be a continuous stream (omitting gaps) and the other allowed that production may be discontinuous, with starts, shut-ins, and re-starts. Both gave estimates of price elasticity higher than that of non-OPEC oil supply in general. We confirmed the rapid decline rates from early peaks that characterize shale wells and demonstrated that, although various factors can shift production up or down, the decline rate remains consistent. Given this, and a much shorter development time, shale oil can be ramped up and down more quickly than conventional oil in North America today. Consequently, the price response of shale oil tends to dampen the long-term price cycle and moderate the price shocks that have plagued the market, and the macroeconomy. Springer US 2022-01-24 2022 /pmc/articles/PMC8785392/ http://dx.doi.org/10.1007/s11053-021-09972-9 Text en © International Association for Mathematical Geosciences 2022 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Original Paper
Vatter, Marc H.
Van Vactor, Samuel A.
Coburn, Timothy C.
Price Responsiveness of Shale Oil: A Bakken Case Study
title Price Responsiveness of Shale Oil: A Bakken Case Study
title_full Price Responsiveness of Shale Oil: A Bakken Case Study
title_fullStr Price Responsiveness of Shale Oil: A Bakken Case Study
title_full_unstemmed Price Responsiveness of Shale Oil: A Bakken Case Study
title_short Price Responsiveness of Shale Oil: A Bakken Case Study
title_sort price responsiveness of shale oil: a bakken case study
topic Original Paper
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8785392/
http://dx.doi.org/10.1007/s11053-021-09972-9
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