IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v145y2020ics0301421520304730.html
   My bibliography  Save this article

Impact of unconventional natural gas development on regional water resources and market supply in China from the perspective of game analysis

Author

Listed:
  • Chen, Yizhong
  • Li, Jing
  • Lu, Hongwei
  • Yang, Yiyang

Abstract

This study presents a detailed framework for evaluating water resource constraint and game-based supply strategies of unconventional and conventional natural gases in China. Surface-water production pressure and groundwater-pollution risk level are used to measure the extent of water resource constraint on shale gas development. Cournot and Stackelberg game models are applied to illustrate the oligopoly mechanism between unconventional and conventional natural gas manufacturing. A subsidy multiplier model is then proposed to identify the impact of government subsidy on different game strategies. Results indicate that high amounts of estimated ultimate recovery and recycling wastewater would significantly reduce water resources consumption during shale gas development. An increased subsidy coefficient would increase the amount of unconventional natural gas but decrease the amount of conventional natural gas. However, the majority of subsidy multiplier values would be less than 1, implying an inconspicuous effect of the subsidy. Moreover, the equilibrium production of unconventional natural gas in the Cournot and Stackelberg game models would increase with the increased substitution factor m1 but decrease with the increased substitution factor m2. Conversely, the high amount of equilibrium production of conventional natural gas would increase the substitution factor m2 but reduce the substitution factor m1 within these two models.

Suggested Citation

  • Chen, Yizhong & Li, Jing & Lu, Hongwei & Yang, Yiyang, 2020. "Impact of unconventional natural gas development on regional water resources and market supply in China from the perspective of game analysis," Energy Policy, Elsevier, vol. 145(C).
    • Handle: RePEc:eee:enepol:v:145:y:2020:i:c:s0301421520304730
    DOI: 10.1016/j.enpol.2020.111750
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421520304730
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2020.111750?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Khalil, Munawar & Jan, Badrul Mohamed & Tong, Chong Wen & Berawi, Mohammed Ali, 2017. "Advanced nanomaterials in oil and gas industry: Design, application and challenges," Applied Energy, Elsevier, vol. 191(C), pages 287-310.
    2. Yuan, Jiehui & Luo, Dongkun & Xia, Liangyu & Feng, Lianyong, 2015. "Policy recommendations to promote shale gas development in China based on a technical and economic evaluation," Energy Policy, Elsevier, vol. 85(C), pages 194-206.
    3. Jiang, Zhujun & Tan, Jijun, 2013. "How the removal of energy subsidy affects general price in China: A study based on input–output model," Energy Policy, Elsevier, vol. 63(C), pages 599-606.
    4. Wang, Jianliang & Mohr, Steve & Feng, Lianyong & Liu, Huihui & Tverberg, Gail E., 2016. "Analysis of resource potential for China’s unconventional gas and forecast for its long-term production growth," Energy Policy, Elsevier, vol. 88(C), pages 389-401.
    5. Wang, Jinsheng & Ryan, David & Anthony, Edward J., 2011. "Reducing the greenhouse gas footprint of shale gas," Energy Policy, Elsevier, vol. 39(12), pages 8196-8199.
    6. He, Li & Du, Peng & Chen, Yizhong & Lu, Hongwei & Cheng, Xi & Chang, Bei & Wang, Zheng, 2017. "Advances in microbial fuel cells for wastewater treatment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 388-403.
    7. Deyi Hou & Jian Luo & Abir Al-Tabbaa, 2012. "Shale gas can be a double-edged sword for climate change," Nature Climate Change, Nature, vol. 2(6), pages 385-387, June.
    8. Douglas B. Reynolds & Marek Kolodziej, 2009. "North American Natural Gas Supply Forecast: The Hubbert Method Including the Effects of Institutions," Energies, MDPI, vol. 2(2), pages 1-38, May.
    9. Wang, Ting & Lin, Boqiang, 2014. "Impacts of unconventional gas development on China׳s natural gas production and import," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 546-554.
    10. Chen, Yizhong & He, Li & Li, Jing & Cheng, Xi & Lu, Hongwei, 2016. "An inexact bi-level simulation–optimization model for conjunctive regional renewable energy planning and air pollution control for electric power generation systems," Applied Energy, Elsevier, vol. 183(C), pages 969-983.
    11. Guo, Meiyu & Lu, Xi & Nielsen, Chris P. & McElroy, Michael B. & Shi, Wenrui & Chen, Yuntian & Xu, Yuan, 2016. "Prospects for shale gas production in China: Implications for water demand," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 742-750.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. He, Li & Feng, Hushen & Luo, Pengfei & Luo, Yugeng & Xu, Yang, 2023. "Groundwater stress induced by shale resources development in the US: Evolution, response, and mitigation," Applied Energy, Elsevier, vol. 340(C).
    2. Weisong Li & Zhenwei Wang & Zhibin Mao & Jiaxing Cui, 2022. "Spatially Non-Stationary Response of Carbon Emissions to Urbanization in Han River Ecological Economic Belt, China," IJERPH, MDPI, vol. 20(1), pages 1-15, December.
    3. Cheng Che & Xin Geng & Huixian Zheng & Yi Chen & Xiaoguang Zhang, 2022. "The Pricing Mechanism Analysis of China’s Natural Gas Supply Chain under the “Dual Carbon” Target Based on the Perspective of Game Theory," Sustainability, MDPI, vol. 14(15), pages 1-21, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Jianliang & Liu, Mingming & McLellan, Benjamin C. & Tang, Xu & Feng, Lianyong, 2017. "Environmental impacts of shale gas development in China: A hybrid life cycle analysis," Resources, Conservation & Recycling, Elsevier, vol. 120(C), pages 38-45.
    2. Xiaoqian Guo & Qiang Yan & Anjian Wang, 2017. "Assessment of Methods for Forecasting Shale Gas Supply in China Based on Economic Considerations," Energies, MDPI, vol. 10(11), pages 1-14, October.
    3. Calderón, Andrés J. & Guerra, Omar J. & Papageorgiou, Lazaros G. & Reklaitis, Gintaras V., 2018. "Disclosing water-energy-economics nexus in shale gas development," Applied Energy, Elsevier, vol. 225(C), pages 710-731.
    4. Fan, Lurong & Xu, Jiuping, 2020. "Authority–enterprise equilibrium based mixed subsidy mechanism for carbon reduction and energy utilization in the coalbed methane industry," Energy Policy, Elsevier, vol. 147(C).
    5. Chen, Yizhong & He, Li & Li, Jing, 2017. "Stochastic dominant-subordinate-interactive scheduling optimization for interconnected microgrids with considering wind-photovoltaic-based distributed generations under uncertainty," Energy, Elsevier, vol. 130(C), pages 581-598.
    6. Xunpeng, Shi & Variam, Hari Malamakkavu Padinjare & Tao, Jacqueline, 2017. "Global impact of uncertainties in China’s gas market," Energy Policy, Elsevier, vol. 104(C), pages 382-394.
    7. Sharafian, Amir & Talebian, Hoda & Blomerus, Paul & Herrera, Omar & Mérida, Walter, 2017. "A review of liquefied natural gas refueling station designs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 503-513.
    8. Wang, Fang & Zhang, Deli & Shen, Xiuli & Liu, Weidong & Yi, Weiming & Li, Zhihe & Liu, Shanjian, 2019. "Synchronously electricity generation and degradation of biogas slurry using microbial fuel cell," Renewable Energy, Elsevier, vol. 142(C), pages 158-166.
    9. Zhang, Yi & Ji, Qiang & Fan, Ying, 2018. "The price and income elasticity of China's natural gas demand: A multi-sectoral perspective," Energy Policy, Elsevier, vol. 113(C), pages 332-341.
    10. Mr. Kangni R Kpodar & Ms. Stefania Fabrizio & Kodjovi M. Eklou, 2019. "Export Competitiveness - Fuel Price Nexus in Developing Countries: Real or False Concern?," IMF Working Papers 2019/025, International Monetary Fund.
    11. Shangfeng Han & Baosheng Zhang & Xiaoyang Sun & Song Han & Mikael Höök, 2017. "China’s Energy Transition in the Power and Transport Sectors from a Substitution Perspective," Energies, MDPI, vol. 10(5), pages 1-25, April.
    12. Huang, Bao-Cheng & Li, Wen-Wei & Wang, Xu & Lu, Yan & Yu, Han-Qing, 2019. "Customizing anaerobic digestion-coupled processes for energy-positive and sustainable treatment of municipal wastewater," Renewable and Sustainable Energy Reviews, Elsevier, vol. 110(C), pages 132-142.
    13. Jin, Lu & Hawthorne, Steven & Sorensen, James & Pekot, Lawrence & Kurz, Bethany & Smith, Steven & Heebink, Loreal & Herdegen, Volker & Bosshart, Nicholas & Torres, José & Dalkhaa, Chantsalmaa & Peters, 2017. "Advancing CO2 enhanced oil recovery and storage in unconventional oil play—Experimental studies on Bakken shales," Applied Energy, Elsevier, vol. 208(C), pages 171-183.
    14. Fan, Zhi-Ping & Cai, Siqin & Guo, Dongliang & Xu, Bo, 2022. "Facing the uncertainty of renewable energy production: Production decisions of a power plant with different risk attitudes," Renewable Energy, Elsevier, vol. 199(C), pages 1237-1247.
    15. Rao, Xiang & Sheng, Chenxing & Guo, Zhiwei & Dai, Leyang & Yuan, Chengqing, 2023. "A novel finding on tribological, emission, and vibration performances of diesel engines linking to graphene-attapulgite lubricants additives under hot engine tests," Renewable and Sustainable Energy Reviews, Elsevier, vol. 182(C).
    16. Marcin Kremieniewski, 2022. "Improving the Efficiency of Oil Recovery in Research and Development," Energies, MDPI, vol. 15(12), pages 1-7, June.
    17. Eleanor Stephenson & Karena Shaw, 2013. "¨ A Dilemma of Abundance: Governance Challenges of Reconciling Shale Gas Development and Climate Change Mitigation," Sustainability, MDPI, vol. 5(5), pages 1-23, May.
    18. Janda, Karel & Kourilek, Jakub, 2016. "Description of Biofuels and Shale Gas Development," MPRA Paper 74885, University Library of Munich, Germany.
    19. Monika Gajec & Ewa Kukulska-Zając & Anna Król, 2021. "Optimization of Silver Nanoparticle Separation Method from Drilling Waste Matrices," Energies, MDPI, vol. 14(7), pages 1-17, April.
    20. Xia Wu & Jun Xia & Baoshan Guan & Xinming Yan & Lei Zou & Ping Liu & Lifeng Yang & Si Hong & Sheng Hu, 2019. "Water Availability Assessment of Shale Gas Production in the Weiyuan Play, China," Sustainability, MDPI, vol. 11(3), pages 1-22, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:145:y:2020:i:c:s0301421520304730. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.