Global S&T Development Trend Analysis Platform of Resources and Environment
DOI | 10.1016/j.enpol.2020.111639 |
Stochastic analysis of a shale gas investment strategy for coping with production uncertainties | |
Yang Bai, Jie Meng, Fanyi Meng, Guochang Fang | |
2020-06-23 | |
发表期刊 | Energy Policy |
出版年 | 2020 |
英文摘要 | The soaring demand for natural gas and deteriorating environmental conditions in recent years have together created a significant incentive for China to develop shale gas exploration. In this endeavor, production capacity is a major uncertainty that substantially affects the net investment return. We propose a Markov decision process model to explore and determine the desirable investment strategy under such uncertainty. Our model has the advantage of being able to handle dynamic stochastic market states, and it considers not only the value of the project itself (net cash flow) but also the social welfare, environmental cost, and financial subsidy. Our objective is to maximize the long run expected return of investment. The methodology was applied to determine the investment strategy for a case study in China. We found that the project is feasible only when the production capacity is larger than 8.55 billion cubic meters. Additional shale gas supply may generate higher sales revenue. However, the benefits may be neutralized by the decrease in price when domestic demand is inelastic to price. We also found that financial subsidy is an effective incentive for shale gas investment because it significantly increases the expected return of investment. |
领域 | 气候变化 |
URL | 查看原文 |
引用统计 | |
文献类型 | 期刊论文 |
条目标识符 | http://119.78.100.173/C666/handle/2XK7JSWQ/278085 |
专题 | 气候变化 |
推荐引用方式 GB/T 7714 | Yang Bai, Jie Meng, Fanyi Meng, Guochang Fang. Stochastic analysis of a shale gas investment strategy for coping with production uncertainties[J]. Energy Policy,2020. |
APA | Yang Bai, Jie Meng, Fanyi Meng, Guochang Fang.(2020).Stochastic analysis of a shale gas investment strategy for coping with production uncertainties.Energy Policy. |
MLA | Yang Bai, Jie Meng, Fanyi Meng, Guochang Fang."Stochastic analysis of a shale gas investment strategy for coping with production uncertainties".Energy Policy (2020). |
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