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A System Dynamics Analysis of Investment, Technology and Policy that Affect Natural Gas Exploration and Exploitation in China

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  • Jianzhong Xiao

    () (School of Economics and Management, China University of Geosciences, Wuhan 430074, China
    Resources and Environment Economic Research Center, China University of Geosciences, Wuhan 430074, China)

  • Jinhua Cheng

    () (School of Economics and Management, China University of Geosciences, Wuhan 430074, China
    Resources and Environment Economic Research Center, China University of Geosciences, Wuhan 430074, China)

  • Jun Shen

    () (School of Economics and Management, China University of Geosciences, Wuhan 430074, China
    Resources and Environment Economic Research Center, China University of Geosciences, Wuhan 430074, China)

  • Xiaolin Wang

    () (School of Economics and Management, China University of Geosciences, Wuhan 430074, China
    Resources and Environment Economic Research Center, China University of Geosciences, Wuhan 430074, China)

Abstract

Natural gas has an increasing role in Chinese energy transformation. We present a system dynamics model of the natural gas industry in China. A new system dynamics model for natural gas companies based on reserve exploration and well construction as well as investment dynamics is proposed. The contribution of the paper is to analyze the influence of technology, investment and policy factors on the natural gas industry. We found that the dynamics of the main variables, including gas policy, cost of investment, accounting depreciation and exploitation technology, are sensitive to the sustainable development of resources. The simulations and results presented here will be helpful for government to reform policies, and for upstream companies to make decisions.

Suggested Citation

  • Jianzhong Xiao & Jinhua Cheng & Jun Shen & Xiaolin Wang, 2017. "A System Dynamics Analysis of Investment, Technology and Policy that Affect Natural Gas Exploration and Exploitation in China," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-19, January.
  • Handle: RePEc:gam:jeners:v:10:y:2017:i:2:p:154-:d:88741
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    References listed on IDEAS

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    1. Budzianowski, Wojciech M. & Budzianowska, Dominika A., 2015. "Economic analysis of biomethane and bioelectricity generation from biogas using different support schemes and plant configurations," Energy, Elsevier, vol. 88(C), pages 658-666.
    2. Zhang, Qi & Li, Zhan & Wang, Ge & Li, Hailong, 2016. "Study on the impacts of natural gas supply cost on gas flow and infrastructure deployment in China," Applied Energy, Elsevier, vol. 162(C), pages 1385-1398.
    3. Lin, Boqiang & Wang, Ting, 2012. "Forecasting natural gas supply in China: Production peak and import trends," Energy Policy, Elsevier, vol. 49(C), pages 225-233.
    4. Aslani, Alireza & Helo, Petri & Naaranoja, Marja, 2014. "Role of renewable energy policies in energy dependency in Finland: System dynamics approach," Applied Energy, Elsevier, vol. 113(C), pages 758-765.
    5. Chi, K.C. & Reiner, D.M. & Nuttall, W.J., 2009. "Dynamics of the UK Natural Gas Industry: System Dynamics Modelling and Long-Term Energy Policy Analysis," Cambridge Working Papers in Economics 0922, Faculty of Economics, University of Cambridge.
    6. Fan, Ying & Yang, Rui-Guang & Wei, Yi-Ming, 2007. "A system dynamics based model for coal investment," Energy, Elsevier, vol. 32(6), pages 898-905.
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    1. repec:gam:jeners:v:10:y:2017:i:9:p:1352-:d:111202 is not listed on IDEAS

    More about this item

    Keywords

    natural gas industry; system dynamics modeling; exploitation and exploration; China;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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