气候变化领域集成服务门户(CCPortal): Stochastic analysis of a shale gas investment strategy for coping with production uncertainties

CCPortal

DOI	10.1016/j.enpol.2020.111639
	Stochastic analysis of a shale gas investment strategy for coping with production uncertainties
	Bai Y.; Meng J.; Meng F.; Fang G.
发表日期	2020
ISSN	03014215
卷号	144
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. © 2020 Elsevier Ltd
关键词	Investment strategy Markov decision process Production uncertainty Shale gas
英文关键词	Gases; Geological surveys; Investments; Markov processes; Petroleum prospecting; Shale gas; Stochastic models; Stochastic systems; Strategic planning; Uncertainty analysis; Billion cubic meters; Environmental conditions; Environmental costs; Financial subsidies; Investment strategy; Markov decision process models; Production capacity; Production uncertainty; Economics; coping strategy; gas production; gas supply; gas well; investment; shale gas; stochasticity; China
语种	英语
来源期刊	Energy Policy
文献类型	期刊论文
条目标识符	http://gcip.llas.ac.cn/handle/2XKMVOVA/204553
作者单位	School of Business, Nanjing Normal University, Nanjing, 210023, China; School of Economics and Management Nanjing University of Science and Technology Nanjing210094, China; School of Economics, Nanjing University of Finance and Economics, Nanjing, 210023, China
推荐引用方式 GB/T 7714	Bai Y.,Meng J.,Meng F.,et al. Stochastic analysis of a shale gas investment strategy for coping with production uncertainties[J],2020,144.
APA	Bai Y.,Meng J.,Meng F.,&Fang G..(2020).Stochastic analysis of a shale gas investment strategy for coping with production uncertainties.Energy Policy,144.
MLA	Bai Y.,et al."Stochastic analysis of a shale gas investment strategy for coping with production uncertainties".Energy Policy 144(2020).