The price system should theoretically produce the level of extraction where the rise in price of a natural resource is equal to the interest rate.  However, certain causes may make the market fail to do this.

One major cause of the failure is a lack of knowledge on the part of those who own natural resources.  They might not be able to accurately estimate what the price level will be in the near future, and will therefore not know how much to extract at present.

Another problem is that owners of resources may have inadequate property rights.  If a firm completely owns a natural resource, it can follow the rate of extraction predicted by economic theory.

However, firms do not always have sole ownership of a source of an exhaustible resource.  Sometimes, the resource may be commonly owned.  As a result, if the firm does not extract now, others might, and the firm will not have the option of extracting in the future.  This leads to excessive rates of extraction.

Another cause of excessive extraction is a corporation's fear that its ownership of a resource is threatened.  For example, a rich transnational corporation from an industrialized country making lavish profits in an impoverished third-world nation might worry about having its assets nationalized or seized in the event of an election or revolution.

The third cause of market failure is when the interest rate is inappropriate for the entire society.  Some might say that if the interest rate is very high and tremendous amounts of a resource are being extracted, this is inconsistent with society's goals.  Such people would argue that the government should interfere to prevent this from happening.