Two empirical views of horizontal diversification by petroleum firms into nonpetroleum energy markets are presented in this paper. The first view consists of simply displaying descriptive statistics that show how petroleum firms are participating in two energy sectors outside of petroleum. The second view derives methods for combining the descriptive information on multiple involvements into a meaningful single number; that is, a diversification index. The descriptive analysis of interfuel diversification patterns for individual firms considers domestic production and reserve ownership of petroleum (crude oil and gas), coal, and uranium as the appropriate measures of participation in the three fuel industries. Reserve data was aggregated on both Btu and selling-price bases, and production data was similarly treated. Each firm's interfuel diversification pattern was characterized by calculating the percentage of its total reserves (or, alternatively, total production) accounted for by each of the three fuel types. (ERA citation 04:030485)
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