We show how a monopolistic owner of oil reserves responds to a carbon-free substitute becoming available at some uncertain point in the future if demand is isoelastic and variable extraction costs are zero but upfront exploration investment costs have to be made. Not the arrival of this...

For the past half-century, a debate has raged over when "peak oil" will occurthe point at which output can no longer increase and production begins to level off or gradually decline. Determining how long the oil supply will last has become even more pressing because the world's energy supply...