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Environmental and Natural Resource Economics


This paper tests the hypothesis that technological change has offset depletion for offshore oil and gas production in the Gulf of Mexico using a unique micro-level data set from 1947–1998. The study supports the hypothesis that technological progress has mitigated depletion effects for our case study, but the pattern differs from the conventional wisdom for non-renewable resource industries. Contrary to the usual assumptions of monotonic changes in productivity or an inverted “U”-shaped pattern, we found that productivity declined for the first 30 years of our study period. But more recently, the rapid pace of technological change has outpaced depletion and productivity has increased rapidly, particularly in most recent 5 years of our study period. We also provide a more thorough understanding of different components of technological change and depletion.

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.