The economics of exploiting gas hydrates.

Doepke, Lena-Katharina and Requate, Till (2014) The economics of exploiting gas hydrates. Energy Economics, 42 . pp. 355-364.

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Abstract

We investigate the optimal exploitation of methane hydrates, a recent discovery of methane resources under the sea floor, mainly located along the continental margins. Combustion of methane (releasing CO2) and leakage through blow-outs (releasing CH4) contribute to the accumulation of greenhouse gases. A second externality arises since removing solid gas hydrates from the sea bottom destabilizes continental margins and thus increases the risk of marine earthquakes. We show that in such a model three regimes can occur: i) resource exploitation will be stopped in finite time, and some of the resource will stay in situ, ii) the resource will be used up completely in finite time, and iii) the resource will be exhausted in infinite time. We also show how to internalize the externalities by policy instruments. (C) 2013 Elsevier B.V. All rights reserved.

Document Type: Article
Additional Information: Times Cited: 0 0
Research affiliation: OceanRep > The Future Ocean - Cluster of Excellence > FO-R03
OceanRep > The Future Ocean - Cluster of Excellence > FO-R05
OceanRep > The Future Ocean - Cluster of Excellence > FO-R02
Kiel University
OceanRep > The Future Ocean - Cluster of Excellence
OceanRep > The Future Ocean - Cluster of Excellence > FO-R01
Refereed: Yes
ISSN: 0140-9883
Projects: Future Ocean
Date Deposited: 30 Mar 2015 12:10
Last Modified: 05 Apr 2017 07:08
URI: http://oceanrep.geomar.de/id/eprint/27478

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