Research On The Worth Of Unconventional Oil And Gas Extraction From Perspectives Of Energy Return And Financial Return

With the depletion of world’s conventional oil and gas resources,unconventional oil and gas are attracting more and more attention.In the analysis of the worth of unconventional oil and gas extraction,different scholars and institutions choose different perspectives,and get very different conclusions.This makes it difficult for the energy policymakers to make comprehensive judgment on the worth of unconventional oil and gas extraction.Most traditional methods of worth evaluation of oil and gas extraction are based on financial return indicators,but neglect the consideration of the ecological environment.In addition,because the financial return indicators are always affected by the fluctuation of oil and gas prices,they sometimes cannot reflect the objective worth of oil and gas extraction.Since unconventional oil and gas extraction has significant implication to the environment and could be significantly affected by the fluctuation of oil and gas prices,this paper introduces the energy return analysis method,from the perspective of physical analysis,of unconventional oil and gas extraction.On the other hand,since the energy return analysis method itself is not enough to support the judgment of the worth of unconventional oil and gas extraction,this paper combines the energy return analysis method with the traditional financial return analysis method,based on the objective relative weighting method and creates the comprehensive worth evaluation method of unconventional oil and gas extraction to include both the resource worth and the financial worth of unconventional oil and gas extraction.In order to solve the problem of data limitation and inaccuracy,this paper puts forward the concept of analyzing the worth of unconventional oil and gas extraction from both enterprise-level and industrylevel,and constructs different worth evaluation methods for the enterprise-level analysis and the industry-level analysis.Based on the methods mentioned above,this paper evaluates the current situation and prospect of the extraction worth of two typical types of unconventional oil and gas in the world(Canadian oil sands and US shale oil and gas)from the perspectives of traditional financial return,energy return and comprehensive return respectively.The results of the research show that from the perspective of energy return,the current worth of Canadian oil sands extraction is only slightly higher than the threshold,the current worth of U.S.shale oil and gas is relatively higher;from the perspective of financial return,the current oil sands are not worth extracting,shale oil and gas are worth extracting but the worth is unstable;from the perspective of comprehensive return,oil sands are not worth extracting currently,the worth of shale oil and gas extraction is at a moderate low level.Over the next 35 years,the worth of both oil sands extraction and shale oil and gas extraction will rise and then fall;oil sands will be temporarily worth extracting during the period 2019-2042,and the future worth of shale oil and gas extraction will decline sharply after a very short-term rise,and will fall to the threshold value around 2050.Considering environment factor will drive EROI of unconventional oil and gas down significantly;in face of the large uncertainty of the future oil and gas price,when estimating the future worth of unconventional oil and gas extraction,energy return ratio can give more stable and useful result than financial return ratio.Since the energy return ratio and financial return ratio of unconventional oil and gas extraction companies/sectors reflect different trends,the comprehensive worth evaluation method can consider both the two indicators,thus provides energy policy makers a useful method to judge the worth of unconventional oil and gas extraction.