A DYNAMIC MODEL OF CLEANUP: ESTIMATING SUNK COSTS IN OIL AND GAS PRODUCTION

被引:38
作者
Muehlenbachs, Lucija [1 ,2 ]
机构
[1] Univ Calgary, Calgary, AB T2N 1N4, Canada
[2] Resources Future Inc, Washington, DC USA
关键词
MAXIMUM-LIKELIHOOD-ESTIMATION; NONRENEWABLE RESOURCES; NATURAL-GAS; INVESTMENTS; OPTIONS; PENNSYLVANIA; UNCERTAINTY; DECISIONS; ECONOMICS; LEAKAGE;
D O I
10.1111/iere.12098
中图分类号
F [经济];
学科分类号
02 ;
摘要
The environmental remediation required to permanently decommission most industrial projects is an expensive, irreversible investment. Real options literature shows that temporary closure has value under uncertainty. However, even if there is no intention to restart operations, there is an incentive to label a closure as temporary to avoid having to remediate ongoing or future environmental externalities. I estimate a dynamic discrete choice model of closure under price and quantity uncertainty to evaluate the likelihood of reactivation. The model reveals that the option to temporarily close is being widely used to avoid environmental remediation of oil and gas wells in Canada.
引用
收藏
页码:155 / 185
页数:31
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