Abstract
Sound energy policy requires an understanding of the inter-relationships among oil and gas operations, energy costs and prices, government fees and regulation, infrastructure aging and other factors. Using system dynamics tools, we have developed a computer model to explore policy issues from the viewpoints of governmental agencies and energy producers. All interested parties are included as model actors that are driven by their interests (e.g., profitability) and are affected by the success or failure of hydrocarbon production activities and government policies. We also determine the variables that have the greatest impact on all parties and use the model to help identify the best strategies to employ in the light of uncertainties.
The model can be run as a scenario generator to find the best solutions or as a flight management simulator for training.
This makes our approach very useful to government agencies, energy companies or both groups working together.
Model results are reported showing significantly better solutions to energy policy problems than traditional linear systems or those that only focus on one aspect of the total problem (e.g., reservoir simulation, project economics, etc.). The interplay among various system components can reveal solutions that would not be found otherwise. Our approach is not about finding a unique solution, but understanding the problem and important trends. Each problem is unique.
The system dynamics methodology has rarely been used to study and understand the behaviour of petroleum energy systems. Therefore, our approach represents a new paradigm compared to more traditional techniques that typically focus on individual system components. We are interested in how production related issues affect economics and vice versa. Our model enables us to rapidly study more complex, inter-connected systems than have otherwise been reported in the petroleum literature.
