Oil extraction rates

dms dmschanoes at earthlink.net
Sat Aug 16 19:24:41 MDT 2003


Les asked me to look at paper called "Oil extraction puzzle: theory and
practice," specifically if I could make sense of the economics of the paper.
The answer to that question is no, I can't, but....

I think the paper is looking at extraction rates of oil by countries versus
their estimated reserves to determine a norm or optimal rate of extraction.

The paper includes various models of competition and monopoly and concludes,
I think, that there is little difference between the two-- which is not
unexpected to those Marxists who regard monopoly as subject to the same
demands of surplus value extraction as anything else.

The paper also establishes, I think, that there is a linear relation between
extraction rates and reserves and it would appear that either Saudi Arabia
is overextracting or it has overestimated reserves.

Like I said, I may have totally missed the point of the paper, so if anyone
else has looked at it and knows, please feel free to jump in.

dms




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