Optimal path for China's strategic petroleum reserve: A dynamic programming analysis
This paper proposes a dynamic programming model to explore the optimal stockpiling path for China's strategic petroleum reserve before 2020. The optimal oil acquisition sizes in 2008–2020 under different scenarios are estimated. The effects of oil price, risks and elasticity value on inventory size are further investigated. It is found that the optimal stockpile acquisition strategies are mainly determined by oil price and total inventory costs. While oil supply disruption is not considered, China's optimal stockpile acquisition rate increases from 19.2 to 52million barrels from 2008 to 2020. If an oil supply disruption occurs, the oil acquisition rate will be reduced significantly. However, it may not be a good strategy to interrupt oil reserve activities in order to minimize the total costs for the entire planning period.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Timothy J. Considine, 2006. "Is the Strategic Petroleum Reserve our Ace in the Hole?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 91-112.
- Samouilidis, JE & Berahas, SA, 1982. "A methodological approach to strategic petroleum reserves," Omega, Elsevier, vol. 10(5), pages 565-574.
- Nordhaus, William D, 1974. "The 1974 Report of the President's Council of Economic Advisers: Energy in the Economic Report," American Economic Review, American Economic Association, vol. 64(4), pages 558-565, September.
- Tolley, George S & Wilman, John D, 1977. "The Foreign Dependence Question," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 323-347, April.
- Zweifel, Peter & Bonomo, Susanne, 1995. "Energy security Coping with multiple supply risks," Energy Economics, Elsevier, vol. 17(3), pages 179-183, July.
- Zhang, Xiao-Bing & Fan, Ying & Wei, Yi-Ming, 2009. "A model based on stochastic dynamic programming for determining China's optimal strategic petroleum reserve policy," Energy Policy, Elsevier, vol. 37(11), pages 4397-4406, November.
- Kumbaroglu, Gürkan & Madlener, Reinhard & Demirel, Mustafa, 2008.
"A real options evaluation model for the diffusion prospects of new renewable power generation technologies,"
Elsevier, vol. 30(4), pages 1882-1908, July.
- Gürkan Kumbaroglu & Reinhard Madlener & Mustafa Demirel, 2004. "A Real Options Evaluation Model for the Diffusion Prospects of New Renewable Power Generation Technologies," CEPE Working paper series 04-35, CEPE Center for Energy Policy and Economics, ETH Zurich.
- R. Glenn Hubbard & Robert J. Weiner, 1986. "Inventory Optimization in the U.S. Petroleum Industry: Empirical Analysis and Implications for Energy Emergency Policy," Management Science, INFORMS, vol. 32(7), pages 773-790, July.
- Wu, Gang & Fan, Ying & Liu, Lan-Cui & Wei, Yi-Ming, 2008. "An empirical analysis of the dynamic programming model of stockpile acquisition strategies for China's strategic petroleum reserve," Energy Policy, Elsevier, vol. 36(4), pages 1470-1478, April.
- Frederic H. Murphy & Michael A. Toman & Howard J. Weiss, 1987. "A Stochastic Dynamic Nash Game Analysis of Policies for Managing the Strategic Petroleum Reserves of Consuming Nations," Management Science, INFORMS, vol. 33(4), pages 484-499, April.
- Wei, Yi-Ming & Wu, Gang & Fan, Ying & Liu, Lan-Cui, 2008. "Empirical analysis of optimal strategic petroleum reserve in China," Energy Economics, Elsevier, vol. 30(2), pages 290-302, March.
- Kuenne, Robert E. & Blankenship, Jerry W. & McCoy, Paul F., 1979. "Optimal drawdown patterns for strategic petroleum reserves," Energy Economics, Elsevier, vol. 1(1), pages 3-13, January.
- William W. Hogan, 1983. "Oil Stockpiling: Help Thy Neighbor," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 49-72.
- Shmuel S. Oren & Shao Hong Wan, 1986. "Optimal Strategic Petroleum Reserve Policies: A Steady State Analysis," Management Science, INFORMS, vol. 32(1), pages 14-29, January. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:34:y:2012:i:4:p:1058-1063. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.