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

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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.

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Notes

  1. Also known as Battle of the Sexes.

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Acknowledgments

This work was supported in part by the National Council of Science and Technology CONACYT, Mexico.

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Authors and Affiliations

  1. Consejo Nacional de Ciencia y Tecnologia, Mexico City, Mexico

    Lauro J. Martinez

  2. Department of Systems and Information Engineering, University of Virginia, Charlottesville, VA, USA

    Lauro J. Martinez & James H. Lambert

  3. School of Engineering and Applied Science, 151 Engineer’s Way 112 Olson Hall, P.O. Box 400736, Charlottesville, VA, 22904-4736, USA

    Lauro J. Martinez & James H. Lambert

  4. Department of Management, University of Richmond, Richmond, VA, USA

    Shital A. Thekdi

  5. Robins School of Business, 1 Gateway Rd., Richmond, VA, 23173, USA

    Shital A. Thekdi

  6. Center for Risk Management of Engineering Systems, University of Virginia, Charlottesville, VA, USA

    James H. Lambert

Authors
  1. Lauro J. Martinez
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  2. Shital A. Thekdi
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  3. James H. Lambert
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Correspondence to Shital A. Thekdi.

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Martinez, L.J., Thekdi, S.A. & Lambert, J.H. Modeling energy facility regulatory compliance with application to multi-scale liquefied natural gas facilities. Environ Syst Decis 33, 404–412 (2013). https://doi.org/10.1007/s10669-013-9457-2

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  • DOI: https://doi.org/10.1007/s10669-013-9457-2

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