Environment Systems and Decisions

, Volume 33, Issue 3, pp 404–412 | Cite as

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

  • Lauro J. Martinez
  • Shital A. Thekdi
  • James H. Lambert


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.


Multi-scale decision making Finitely repeated games Liquefied natural gas Permitting process Negotiation theory Regulatory analysis Energy security 



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


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Lauro J. Martinez
    • 1
    • 2
    • 3
  • Shital A. Thekdi
    • 4
    • 5
  • James H. Lambert
    • 2
    • 3
    • 6
  1. 1.Consejo Nacional de Ciencia y TecnologiaMexico CityMexico
  2. 2.Department of Systems and Information EngineeringUniversity of VirginiaCharlottesvilleUSA
  3. 3.School of Engineering and Applied ScienceCharlottesvilleUSA
  4. 4.Department of ManagementUniversity of RichmondRichmondUSA
  5. 5.Robins School of BusinessRichmondUSA
  6. 6.Center for Risk Management of Engineering Systems, University of VirginiaCharlottesvilleUSA

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