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Summary: www.eprg.group.cam.ac.uk
EPRGWORKINGPAPERNON-TECHNICALSUMMARY
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. Nuttall
The UK offshore natural gas and oil industry has a long and successful history and
has been said to represent the pride of UK engineering science. For over 30 years,
the North Sea has provided the UK with a reliable and flexible source of gas that has
greatly benefited the UK, but as gas reserves, and consequently production, decline
the UK will rely increasingly on imports.
Usually, equilibrium is the principal goal of economic analysis. Nevertheless,
sometimes policy makers are interested not only in equilibrium predictions arising
from traditional economic models but also in the trajectory taken by policy variables
as these variables approach that equilibrium. System dynamics (SD) modelling
approach has been extensively applied for cases in which energy systems are in
transition. Thus, the SD approach is in a good position to analyze systems which are
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