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Experiential Gains with a New Technology: An Empirical Investigation of Hydraulic Fracturing

Published online by Cambridge University Press:  15 September 2016

Timothy Fitzgerald
Timothy Fitzgerald*
Affiliation:
Department of Agricultural Economics and Economics at Montana State University
*
Correspondence: Timothy Fitzgerald ▪ Dept. of Agricultural Economics and Economics ▪ PO Box 172920 ▪ Bozeman, MT 59717 ▪ Phone 406.994.5619 ▪ Email timothy.fitzgerald@montana.edu.
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Abstract

In conjunction with technologies such as horizontal drilling, hydraulic fracturing has transformed U.S. and world energy outlooks by adding reserves from unconventional resources. Fracturing was developed by experimentation and experience. This study empirically analyzes fracturing data for wells in the Williston Basin in North Dakota and Montana, focusing on firms' ability to improve well production over time through collaboration. Results suggest that producers gain from experience with fracturing and that proprietary additives are not generally correlated with greater production but have value for some firms. Experiential gains are stronger for operators than for contractors, but some operator-contractor pairings have productive value.

Keywords

Bakken shaleexperiential gainshydraulic fracturingoil and gastechnological changeunconventional resources
Type
Selected Papers
Information
Agricultural and Resource Economics Review , Volume 44 , Issue 2: Special Issue: Unconventional Gas and Oil Development: Economic and Environmental Impacts , August 2015 , pp. 83 - 105
Copyright
Copyright © 2015 Northeastern Agricultural and Resource Economics Association 

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