The Role of Innovative Development in Unconventional Hydrocarbon Exploitation in the Context of the Shale Gas Revolution in the USA

The Journal for Social, Political, and Economic Studies, Volume 39, Number 4, Winter 2014

31 Pages Posted: 31 Jan 2015  

Irina Grinets

National Research University Higher School of Economics, World economy department

Peter Kaznacheev

Russian Presidential Academy of National Economy and Public Administration (RANEPA), Centre For Resource Economics

Date Written: December 2014

Abstract

Due to the recent drop in oil prices, there is a strong interest in the influence of the shale revolution on the global supply and demand of hydrocarbon fuels. Consequently, the attention of many economists and industry analysts is drawn to the technological, institutional and regulatory aspects of hydrocarbon production from shale deposits in the USA.

The authors analyze factors facilitating the shale gas revolution in the USA, and find that in addition to the obvious factors, such as high prices for gas at the beginning of the 2000s, an important underlying factor was the high level of institutional development in the USA. This was characterized by a legal system that recognized property rights in mineral resources, the existence of a wide variety of business entities operating in the oil and gas sector (including small businesses), and a favorable tax regime. The article presents the results of econometric modeling that traces the USA’s transition from almost exclusively extracting conventional gas to the extraction of unconventional gas.

Keywords: unconventional gas, shale gas revolution, innovative development, institutions

JEL Classification: D2, D4, D7, D9, E2, E3, F2, F4, H2, H5, N5, O1, O3, O51, Q3, Q4

Suggested Citation

Grinets, Irina and Kaznacheev, Peter, The Role of Innovative Development in Unconventional Hydrocarbon Exploitation in the Context of the Shale Gas Revolution in the USA (December 2014). The Journal for Social, Political, and Economic Studies, Volume 39, Number 4, Winter 2014. Available at SSRN: https://ssrn.com/abstract=2553720

Irina Grinets

National Research University Higher School of Economics, World economy department ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Peter Kaznacheev (Contact Author)

Russian Presidential Academy of National Economy and Public Administration (RANEPA), Centre For Resource Economics ( email )

Prospekt Vernadskogo, 82
Moscow, 119571
Russia

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