Homogeneous and heterogeneous diffusion models: Algerian natural gas production

Similar to other non-renewable resources, different options for natural gas production in wide geographic areas may be described through diffusion of innovation models. They provide an indirect estimate of an ultimately recoverable resource, URR, capture the quantitative effects of observed strategic interventions, and allow ex ante assessments of future scenarios over time. The present study offers a framework for systematizing the historical production of conventional Algerian natural gas contrasting homogeneity versus latent heterogeneity hypotheses of the agents involved in extraction dynamics. New models are proposed, and their comparative performances are discussed. In particular, diffusion models with latent heterogeneity of the agents perform better. Our results show a decreasing trend in conventional Algerian natural gas production, which is in agreement with recent published results. Some differences refer to lower URR estimates.