A System Dynamics Model for Analyzing Future Natural Gas Supply and Demand

Abstract

This paper models a natural gas supply and demand system using a system dynamics approach to determine whether current policies for a given country will sustain its long-term natural gas demand. The dynamic effects of natural gas supply and demand, as well as the relationships between the oil and gas sectors are modeled. Of particular interest is to investigate whether the natural gas supply and demand system in a country can provide sufficient capital for future natural gas resource development. The model is illustrated on the case study of Iran, and it is shown that continuing the current trends will result in a gap between natural gas domestic demand and supply, with no natural gas remaining for export. Some policies regarding the increase in domestic natural gas price and more natural gas export are proposed, and their effectiveness in filling the supply and demand gap is examined in three scenarios.

System Dynamics Modelling Scenarios for The Import Receiving Infrastructures Capacity Plan & Development in anticipating Future Deficits of Natural Gas Supply in Indonesia.

“…System Dynamics model was first built under certain modeling structures, main elements and variables are set and a causal loop is further defined. Then under certain assumptions and pre-defined scenarios, stock flow diagram and model formulation are then presented [7].…”

“…An Iranian researcher has used system dynamics model simulation to forecast the future supply and demand of natural gas in Iran and to assess the public policy in determining natural gas pricing in the entire Iranian Energy system. [7], a more recent study has been conducted by group of Indonesian researchers toward the natural gas supply & demand situation in one of Indonesian Province i.e East Java, they used system dynamics model simulation to predict the future shortage of supply and recommending an infrastructure development plant to anticipate the short of supply in the future [8] and [9].…”

Optimal Allocation of Gas Resources to Different Consumption Sectors Using Multi-Objective Goal Programming

“…The priority of sectors for NG allocation determined as injection, export, and power plant Not using uncertainties in utility function Zhang et al [49] Analyzing the effect of domestic NG price increase on the overall economy index Chemical industry will be most influenced by any NG price increase Lack of comparability with similar research Daneshzand et al [50] Sustainability of domestic NG supply on providing financial capital Energy price is one of the main variables directly influencing energy demand and supply Not using pricing policy tools Daneshzand et al [51] Optimal allocation of natural gas to various demand sectors Residential sector should have a much smaller share and the export sector a much larger share of the consumption sector…”

A system dynamics model for optimal allocation of natural gas to various demand sectors

“…System dynamics method is used to simulate the mentioned dynamics, then using simulation optimization approaches, the optimal values of prices are determined. In our previous research, (Daneshzand et al 2018), we developed a system dynamics model to study the sustainability of domestic NG supply by modelling the effect of NG income on providing financial capital in NG industry. In that work, all domestic demand sectors were modeled aggregated, and allocation to various domestic sectors was not modeled.…”