A Longitudinal Study of Fallow Dynamics in the UK Continental Shelf (UKCS)

This paper identifies the causes of and solutions to the problems posed by the fallow assets’ phenomenon in the UK Continental Shelf (UKCS). Using data available in the public domain, including the Fifth Fallow Release, the province's assets were grouped into two broad cross-sections of fallow and non-fallow assets, with further sub-divisions. The dependent variable of interest was the median fallow duration of the assets. Fallow duration was measured in two ways, namely those relating to censored and uncensored data. An empirical panel econometric model was formulated, estimated and simulated to establish the principal causal factors and the effective remedial policy measures. The model estimation results provide evidence that the interactive effects of the key influencing variables are stronger than their individual effects. Thus, the combined effects of reserves and distance from infrastructure have a greater weight on the fallow spell than their individual effects. Several policy simulation runs established that, contrary to some theoretical propositions, (a) stronger rather than weaker government intervention, on occasion, is preferable, and (b) price is not a central determinant of investment timing.