Date of Award
Master of Arts (MA)
Garey C. Durden
James J. Brady
Wayne K. Talley
Call Number for Print
Special Collections LD4331.E26L95
The objective of this thesis is to develop a theory for defining optimal conservation and applying definition to the prevailing rate of domestic petroleum production. Optimal conservation is defined as action designed to achieve or to maintain, from the point of view of society as a whole, the maximum present value of natural resources (or of a natural resource). The proper "action" is defined according to the pure theory of exhaustible resources. The literature survey is a chronological series of articles concerning this theory.
Through building a model which shows that optimal conservation occurs when the marginal internal rate of return is equal to the market rate of interest, adjusted for risk and uncertainty, this paper is able to determine whether the prevailing rate of domestic petroleum fits this definition or not. Testing data for newly discovered United States petroleum reserves for years 1959 through 1975 we concluded that the prevailing rate of discoveries is less than optimal conservation amount.
Finally, we propose the reason for this dilemma and propose a policy of unitization to correct the discovered problem.
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"Conservation According to the Pure Theory of Exhaustible Resources"
(1978). Master of Arts (MA), Thesis, Economics, Old Dominion University, DOI: 10.25777/8zww-qr07