EXPLORATION, RECOVERY, AND TRANSPORTATION 67
price and quantity extracted. For example, a firm may revise its
expectations about the probability of successful exploration either
upward or downward in response to information obtained from
its current exploration. The generation of previously unanticipated
information can alter the resource price, extraction, and exploration
paths so that the observed price path deviates systematically from a
deterministic calculation. The observed time paths for the resource
price and in situ resource value may represent a combination of
many different expected price paths rather than outcomes along
one fully anticipated price path.
Nevertheless, the demand for crude oil is at the highest point
ever and it is getting higher. Exploration is continuing, but reservoirs are not being discovered with the same frequency that they
were five decades ago (Chapter 8). Although there is a considerable
amount of oil remaining in reservoirs in the United States, the oil
is difficult and expensive to produce. Consequently, domestic oil
production has fallen to an all-time low.
Exploration for petroleum originated in the latter part of the
19th century when geologists began to map land features to search
out favorable places to drill for oil. Of particular interest to geologists were outcrops that provided evidence of alternating layers of
porous and impermeable rock. The porous rock, typically a sandstone, limestone, or dolomite, provides the reservoir for the petroleum; the impermeable rock, typically clay or shale, acts as a trap
and prevents migration of the petroleum from the reservoir.
By the early part of the 20th century, most of the areas where surface structural characteristics offered the promise of oil had been
investigated and the era of subsurface exploration for oil began
in the early 1920s (Forbes, 1958). New geological and geophysical
techniques were developed for areas where the strata were not sufficiently exposed to permit surface mapping of the subsurface characteristics. In the 1960s, the development of geophysics provided
methods for exploring below the surface of the earth.
The type of exploration technique employed depends upon the
nature of the site. In other words, and as for many environmental operations, the recovery techniques applied to a specific site
are dictated by the nature of the site and are, in fact, site specific.
For example, in areas where little is known about the subsurface,
preliminary reconnaissance techniques are necessary to identify
potential reservoir systems that warrant further investigation.
price and quantity extracted. For example, a firm may revise its
expectations about the probability of successful exploration either
upward or downward in response to information obtained from
its current exploration. The generation of previously unanticipated
information can alter the resource price, extraction, and exploration
paths so that the observed price path deviates systematically from a
deterministic calculation. The observed time paths for the resource
price and in situ resource value may represent a combination of
many different expected price paths rather than outcomes along
one fully anticipated price path.
Nevertheless, the demand for crude oil is at the highest point
ever and it is getting higher. Exploration is continuing, but reservoirs are not being discovered with the same frequency that they
were five decades ago (Chapter 8). Although there is a considerable
amount of oil remaining in reservoirs in the United States, the oil
is difficult and expensive to produce. Consequently, domestic oil
production has fallen to an all-time low.
Exploration for petroleum originated in the latter part of the
19th century when geologists began to map land features to search
out favorable places to drill for oil. Of particular interest to geologists were outcrops that provided evidence of alternating layers of
porous and impermeable rock. The porous rock, typically a sandstone, limestone, or dolomite, provides the reservoir for the petroleum; the impermeable rock, typically clay or shale, acts as a trap
and prevents migration of the petroleum from the reservoir.
By the early part of the 20th century, most of the areas where surface structural characteristics offered the promise of oil had been
investigated and the era of subsurface exploration for oil began
in the early 1920s (Forbes, 1958). New geological and geophysical
techniques were developed for areas where the strata were not sufficiently exposed to permit surface mapping of the subsurface characteristics. In the 1960s, the development of geophysics provided
methods for exploring below the surface of the earth.
The type of exploration technique employed depends upon the
nature of the site. In other words, and as for many environmental operations, the recovery techniques applied to a specific site
are dictated by the nature of the site and are, in fact, site specific.
For example, in areas where little is known about the subsurface,
preliminary reconnaissance techniques are necessary to identify
potential reservoir systems that warrant further investigation.