Some observations on the evolution of the costs of non-renewable natural resources
by Beno Zaidman
International Journal of Global Energy Issues (IJGEI), Vol. 3, No. 2, 1991

Abstract: A general model for the evaluation of future trends in the cost of non-renewable resources is offered. Two independent contributors to cost are considered. The first one represents the outlays connected with the process of extraction of the resource from the geological deposit and its transformation into a marketable product. The concept of an industrial experience curve is applied to a set of extraction technologies, and the use of an envelope 'experience curve' is proposed. The second component of the cost is the marginal charge to be paid as compensation to the owners of geological deposits of various levels of extractability, as a function of their degree of depletion. The evolution of the costs of the non-renewable resources follows the resultant of these two divergent tendencies. A general algorithm for the cost of those types of resources is offered.

Online publication date: Fri, 18-Jul-2014

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