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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
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    References listed on IDEAS

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    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.

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