A System Dynamics Model for Analyzing Future Natural Gas Supply and Demand

This paper models a natural gas supply and demand system using a system dynamics approach to determine whether current policies for a given country will sustain its long-term natural gas demand. The dynamic effects of natural gas supply and demand, as well as the relationships between the oil and gas sectors are modeled. Of particular interest is to investigate whether the natural gas supply and demand system in a country can provide sufficient capital for future natural gas resource development. The model is illustrated on the case study of Iran, and it is shown that continuing the current trends will result in a gap between natural gas domestic demand and supply, with no natural gas remaining for export. Some policies regarding the increase in domestic natural gas price and more natural gas export are proposed, and their effectiveness in filling the supply and demand gap is examined in three scenarios.