Property-rights application in utilization of natural resources: the case of Iran's natural gas

Thesis/Dissertation · Fri Jan 01 04:00:00 EST 1982

OSTI ID:6378299

Abghari, M H

The concessionaries produce more oil in Iran because of fear of nationalization, lower oil production costs in the Middle East, and more investment opportunities around the globe. This higher discount rate means more oil production and also, more natural gas, a joint product, is produced. Produced natural gas could have been used in the Iranian market, or exported. Low oil prices and high transportation costs of natural gas resulted in the low well-head value of natural gas. The fear of nationalization kept concessionaires from utilizing natural gas in Iran's domestic market. The high transportation costs of natural gas was a negative factor in export utilization. Also, if natural gas, which can be substituted for oil in many uses, were to be utilized, concessionaires would have had to produce less oil. Because oil had a well-established market, it would have been contrary to their interest to leave a lot of oil underground while their concessions ran out. Consequently, they chose to take the oil and flare natural gas. The Iranian government must take responsibility in this matter also. The country's rulers were not concerned with maximizing the country's wealth, but maximizing the security of their regimes, and their personal wealth and pleasure.

• OSTI ID: 6378299
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700 -- Petroleum-- Economics
Industrial
& Business Aspects
03 NATURAL GAS
030600* -- Natural Gas-- Economic
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
ASIA
DEVELOPING COUNTRIES
ECONOMICS
ENERGY SOURCES
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
IRAN
MARKET
MIDDLE EAST
NATURAL GAS
PETROLEUM
RESOURCE DEPLETION