An investment-production-regulatory model for firms in the offshore oil and gas industry. [Economic effects of proposed environmental regulations]

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1991

OSTI ID:7170739

Jin, Di

This tripartite study examines the economic consequences of proposed environmental regulations on firms in the OCS oil and gas industry. The background part reviews the major issues associated with OCS oil and gas development and relevant environmental regulatory proposals. In the theoretical part, models are developed using optimal control theory and the theory of nonrenewable resources to analyze the impact of rising compliance cost on firm's behavior in terms of the investment and production rates over time. Finally, in the simulation part, an integrated investment-production-regulatory model is developed to simulate OCS development with and without the proposed environmental regulations. Effects of regulations are measured in terms of an increase in compliance costs and the associated reduction in net profits from oil and gas production. The theoretical results indicate that an increase in compliance costs will alter exploration, development and production rates. The total investments in exploration and development, and oil production will decrease as a result of rising compliance costs for exploration, development and production over the entire planning period.

• Research Organization: Rhode Island Univ., Kingston, RI (United States)
• OSTI ID: 7170739
• 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
294000 -- Energy Planning & Policy-- Fossil Fuels
ECONOMIC IMPACT
FUNCTIONAL MODELS
INDUSTRY
INVESTMENT
NATURAL GAS INDUSTRY
PETROLEUM INDUSTRY
POLLUTION REGULATIONS
PRODUCTION
REGULATIONS
SIMULATION