Onat Ozer
Pronouns: he/him
Research Mentor(s): Weikun Yang
Research Mentor School/College/Department: Strategy / Business
Program: UROPF
Session: Session 7 (4:40pm – 5:30pm)
Authors: Onat Ozer, Weikun Yang
Abstract
Throughout the past century, firms looking to extract oil from a given region have used what’s widely referred to as ‘conventional’ techniques, which involve drilling a hole straight into the ground where an oil deposit resides, then pumping the oil out of the ground. But recently, a rise in ‘unconventional’ drilling techniques has begun, where firms use a host of advanced technologies in order to extract oil from deposits at a horizontal angle or through impermeable surfaces. This study extends the work of Schumpeter (1934), and P. Aghion, Bloom, N., Blundell, R., Griffith, R., Howitt, Pexamines (2005) to examine the rise of unconventional oil and the impacts it can have on the economy through a careful analysis of industry reports and news, along with linear regression and formal models. Results show that the advent of unconventional oil has greatly expanded the amount of oil that can be extracted from a given field, and the total number of prospective oil fields available to firms. As oil reserves continue to dwindle, it’s very likely that unconventional oil will begin to play a more crucial role in the extraction of oil and gas. The shift to unconventional drilling techniques has already allowed the US to usurp OPEC as the biggest oil exporter, and could allow other countries with massive unconventional oil reserves to become larger exporters, dramatically shaping power dynamics of the global oil market. This shift also could allow the price of oil to remain stable and affordable much longer than previous estimates predicted. If this is the case, regulators hoping to promote green energy may need to create additional incentives in order for consumers to switch to green energy.
