Research on Factors Affecting the Optimal Exploitation of Natural Gas Resources in China

Abstract

This paper develops an optimizing model for the long-term exploitation of limited natural gas reserves in China. In addition to describing the life cycle characteristics of natural gas production and introducing the inter-temporal allocation theory, this paper builds the optimal exploitation model of natural gas resources within a gas field in the Ordos Basin as an example to analyze its exploitation scale and how influence factors, such as recovery rate, discount rate and the gas well exhausting cycle, affect the optimal exploration path of this gas field. We determine that an increase in the discount rate stimulates investors to invest more aggressively in natural gas exploitation in the early period due to the lower discounted value, thereby increasing the pace of the exploitation of natural gas and the exhaustion of gas fields. A higher recoverable factor implies more recoverable reserves and greater potential of increasing the output of gas fields. The exhaustion rate of gas wells affects the capability of converting capacity to output. When exhaustion occurs quickly in gas wells, the output will likely increase in the output rising period, and the output will likely decrease at a faster rate in the output reduction period. Price reform affects the economic recoverable reserves of gas fields.

Toward a Sustainable Low-Carbon China: A Review of the Special Issue of “Energy Economics and Management”

“…Unlike crude oil in China, the natural gas economy is a coal-dominated energy structure economy and suffers from serious pollution problems. A paper develops an optimizing approach to model gas production in China and conducts a sensitivity analysis of the factors affecting the path of natural gas exploitation [15]. In the real process of materials selection, a number of variables should be taken into account.…”

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“…Natural gas resources [15] and the crude oil market [16] were also studied. One paper develops an optimization model for the long-term exploitation of limited natural gas reserves in China and analyzes its exploitation scale and related factors, including recovery rate, discount rate, and the gas well exhaustion cycle, that affect the optimal exploration path of this gas field [15].…”

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