DYNAMICS OF THE UK NATURAL GAS
INDUSTRY: SYSTEM DYNAMICS MODELLING
AND LONG-TERM ENERGY POLICY ANALYSIS
EPRG Working Paper 0913
Cambridge Working Paper in Economics 0922
Kong Chyong Chi, David M. Reiner and William J.
We present a dynamic model of the indigenous natural gas industry in
the UK. The model has been built using a system dynamics approach.
Using the model several scenarios have been analysed. We found that
management of the supply-side policy alone cannot substantially
postpone the discovery, production and consumption peak. We also
found that the dynamics of the main variables, namely, exploration,
production and consumption, are sensitive to initial demand conditions.
Postponing the onset of gas price increases can therefore be achieved
more effectively through efforts to reduce demand growth. One might
expect that a low taxation policy would encourage more exploration and