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U.S. Department of Energy
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Application of quadratic programming to the deregulation of natural gas

Thesis/Dissertation ·
OSTI ID:6014519
A central issue in the energy policymaking arena today is the timing and method of the decontrol of natural gas prices. Current policy dictates a phased deregulation of natural gas prices with a complete lifting of price controls to occur in 1985. Various policy actions being contemplated involve both an accelerated phased decontrol scenario and an immediate removal of natural gas price regulations. The methodolgy utilized to address the natural gas deregulation question and to examine explicitly the scenarios is an adaption of the spatial and temporal price and allocation approach formalized by Takayama. This programming approach allows for the prices and quantities of energy supply, demand, and interregional flows to be determined endogenously within a free market environment and, in addition, facilitates the incorporation of constraints that represent the phased decontrol setting. The demand and supply equations in combination with the policy constraints form the quadratic model. This quadratic problem is, in turn, represented as a linear complementarity programming problem.
OSTI ID:
6014519
Country of Publication:
United States
Language:
English