IDEAS home Printed from https://ideas.repec.org/a/spr/envsyd/v33y2013i3d10.1007_s10669-013-9457-2.html
   My bibliography  Save this article

Modeling energy facility regulatory compliance with application to multi-scale liquefied natural gas facilities

Author

Listed:
  • Lauro J. Martinez

    (Consejo Nacional de Ciencia y Tecnologia
    University of Virginia
    School of Engineering and Applied Science)

  • Shital A. Thekdi

    (University of Richmond
    Robins School of Business)

  • James H. Lambert

    (University of Virginia
    School of Engineering and Applied Science
    Center for Risk Management of Engineering Systems, University of Virginia)

Abstract

Negotiation for permitting and regulatory compliance of energy facilities typically involves complex decision making over multiple planning horizons involving several organizations with possibly competing goals. Delays in compliance negotiation have the potential to undermine or deter the ability for countries and agencies to increase energy capacities and improve overall energy security. There is need for a multi-scale modeling framework with recognition of multiple time horizons, geographies, and organizational entities influencing the system. This paper presents a multi-scale analysis of the review and permitting process for repeated stages of interaction between a private energy operator and an energy regulatory agency. The interaction is modeled as a finitely repeated incomplete information game with identification of steady-state equilibrium conditions. The result is a strategy-guiding tool that can be used to identify potential incentives for cooperation among a variety of decision makers including energy policy decision makers, regulatory agencies, and project developers. The tools are described via a simplified demonstration applied to the permitting of liquefied natural gas terminals in various stages of their lifecycle. There is wide applicability for regulation, approval, deployment, and monitoring of infrastructure and environment in the energy industry.

Suggested Citation

  • Lauro J. Martinez & Shital A. Thekdi & James H. Lambert, 2013. "Modeling energy facility regulatory compliance with application to multi-scale liquefied natural gas facilities," Environment Systems and Decisions, Springer, vol. 33(3), pages 404-412, September.
    • Handle: RePEc:spr:envsyd:v:33:y:2013:i:3:d:10.1007_s10669-013-9457-2
    DOI: 10.1007/s10669-013-9457-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10669-013-9457-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10669-013-9457-2?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. Franz Hubert & Svetlana Ikonnikova, 2011. "Investment Options And Bargaining Power: The Eurasian Supply Chain For Natural Gas," Journal of Industrial Economics, Wiley Blackwell, vol. 59(1), pages 85-116, March.
    2. Egging, Ruud & Gabriel, Steven A. & Holz, Franziska & Zhuang, Jifang, 2008. "A complementarity model for the European natural gas market," Energy Policy, Elsevier, vol. 36(7), pages 2385-2414, July.
    3. Reniers, Genserik & Soudan, Karel, 2010. "A game-theoretical approach for reciprocal security-related prevention investment decisions," Reliability Engineering and System Safety, Elsevier, vol. 95(1), pages 1-9.
    4. Massol, Olivier & Tchung-Ming, Stéphane, 2010. "Cooperation among liquefied natural gas suppliers: Is rationalization the sole objective?," Energy Economics, Elsevier, vol. 32(4), pages 933-947, July.
    5. Lauro J. Martinez & James H. Lambert, 2010. "Prioritising sources of risk at liquefied natural gas storage terminals in Mexico," International Journal of Business Continuity and Risk Management, Inderscience Enterprises Ltd, vol. 1(4), pages 363-383.
    6. Prajit K. Dutta, 1999. "Strategies and Games: Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262041693, December.
    7. Lauro Martinez & James Lambert & Christopher Karvetski, 2010. "Public perception of the risks of liquefied natural gas terminals in Mexico: a prioritisation of communication strategies," International Journal of Critical Infrastructures, Inderscience Enterprises Ltd, vol. 6(4), pages 327-346.
    8. Laurent Franckx, 2001. "ambient environmental inspections in repeated enforcement games," Energy, Transport and Environment Working Papers Series ete0112, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
    9. Martinez, Lauro J. & Lambert, James H. & Karvetski, Christopher W., 2011. "Scenario-informed multiple criteria analysis for prioritizing investments in electricity capacity expansion," Reliability Engineering and System Safety, Elsevier, vol. 96(8), pages 883-891.
    10. Mailath, George J. & Samuelson, Larry, 2006. "Repeated Games and Reputations: Long-Run Relationships," OUP Catalogue, Oxford University Press, number 9780195300796.
    11. Nasiri, Fuzhan & Zaccour, Georges, 2009. "An exploratory game-theoretic analysis of biomass electricity generation supply chain," Energy Policy, Elsevier, vol. 37(11), pages 4514-4522, November.
    12. Guido Tapia Carpio, Lucio & Olimpio Pereira, Amaro Jr, 2006. "Independent operation by subsystems: Strategic behavior for the Brazilian electricity sector," Energy Policy, Elsevier, vol. 34(17), pages 2964-2976, November.
    13. Lise, Wietze & Linderhof, Vincent & Kuik, Onno & Kemfert, Claudia & Ostling, Robert & Heinzow, Thomas, 2006. "A game theoretic model of the Northwestern European electricity market--market power and the environment," Energy Policy, Elsevier, vol. 34(15), pages 2123-2136, October.
    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. Peter A. Beling, 2013. "Multi-scale decision making: challenges in engineering and environmental systems," Environment Systems and Decisions, Springer, vol. 33(3), pages 323-325, September.

    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. Richter, Philipp M. & Holz, Franziska, 2015. "All quiet on the eastern front? Disruption scenarios of Russian natural gas supply to Europe," Energy Policy, Elsevier, vol. 80(C), pages 177-189.
    2. Veronika Grimm & Lars Schewe & Martin Schmidt & Gregor Zöttl, 2019. "A multilevel model of the European entry-exit gas market," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 89(2), pages 223-255, April.
    3. Shital A. Thekdi & James H. Lambert, 2012. "Decision Analysis and Risk Models for Land Development Affecting Infrastructure Systems," Risk Analysis, John Wiley & Sons, vol. 32(7), pages 1253-1269, July.
    4. Lingling Wang & Tsunemi Watanabe, 2016. "A Stackelberg Game Theoretic Analysis of Incentive Effects under Perceived Risk for China’s Straw-Based Power Plant Supply Chain," Energies, MDPI, vol. 9(6), pages 1-20, June.
    5. Chyong, Chi Kong & Hobbs, Benjamin F., 2014. "Strategic Eurasian natural gas market model for energy security and policy analysis: Formulation and application to South Stream," Energy Economics, Elsevier, vol. 44(C), pages 198-211.
    6. Lijun Zeng & Laijun Zhao & Qin Wang & Bingcheng Wang & Yuan Ma & Wei Cui & Yujing Xie, 2018. "Modeling Interprovincial Cooperative Energy Saving in China: An Electricity Utilization Perspective," Energies, MDPI, vol. 11(1), pages 1-25, January.
    7. Skovsgaard, Lise & Jensen, Ida Græsted, 2018. "Recent trends in biogas value chains explained using cooperative game theory," Energy Economics, Elsevier, vol. 74(C), pages 503-522.
    8. Juan‐Pablo Montero & Juan Ignacio Guzman, 2010. "Output‐Expanding Collusion In The Presence Of A Competitive Fringe," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 106-126, March.
    9. Tobias Salz & Emanuel Vespa, 2020. "Estimating dynamic games of oligopolistic competition: an experimental investigation," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 447-469, June.
    10. Daron Acemoglu & Matthew O. Jackson, 2017. "Social Norms and the Enforcement of Laws," Journal of the European Economic Association, European Economic Association, vol. 15(2), pages 245-295.
    11. Kimmo Berg & Gijs Schoenmakers, 2017. "Construction of Subgame-Perfect Mixed-Strategy Equilibria in Repeated Games," Games, MDPI, vol. 8(4), pages 1-14, November.
    12. , & ,, 2015. "A folk theorem for stochastic games with infrequent state changes," Theoretical Economics, Econometric Society, vol. 10(1), January.
    13. Ernesto Dal Bó & Pedro Dal Bó & Rafael Di Tella, 2007. "Reputation When Threats and Transfers Are Available," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(3), pages 577-598, September.
    14. Lochner, Stefan & Dieckhöner, Caroline, 2012. "Civil unrest in North Africa—Risks for natural gas supply?," Energy Policy, Elsevier, vol. 45(C), pages 167-175.
    15. Carmona, Guilherme & Carvalho, Luís, 2016. "Repeated two-person zero-sum games with unequal discounting and private monitoring," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 131-138.
    16. Devine, Mel T. & Russo, Marianna, 2019. "Liquefied natural gas and gas storage valuation: Lessons from the integrated Irish and UK markets," Applied Energy, Elsevier, vol. 238(C), pages 1389-1406.
    17. Bramoullé, Yann & Goyal, Sanjeev, 2016. "Favoritism," Journal of Development Economics, Elsevier, vol. 122(C), pages 16-27.
    18. Megy, Camille & Massol, Olivier, 2023. "Is Power-to-Gas always beneficial? The implications of ownership structure," Energy Economics, Elsevier, vol. 128(C).
    19. Sander Heinsalu, 2018. "Corrigendum to "Managerial Incentive Problems: A Dynamic Perspective"," Papers 1811.00455, arXiv.org, revised Nov 2018.
    20. Nicolas Vieille, 2010. "Recursive Methods in Discounted Stochastic Games: An Algorithm for - 1 and a Folk Theorem," Post-Print hal-00543616, HAL.

    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:spr:envsyd:v:33:y:2013:i:3:d:10.1007_s10669-013-9457-2. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.