Natural Gas Industry Chain Analysis and Upgrade Proposal Based on Dumbbell Model

Natural Gas Industry Chain Analysis and Upgrade Suggestion Based on Dumbbell Model Date:2015-10-10 15:09
The model is based on the physical connection between the upper, middle and lower reaches of the natural gas industry chain and the “dumbbell” shape. Therefore, the natural gas industry chain can be compared to a “dumbbell”. This "dumbbell" is the use of a metal pipe section connected to two metal balls, the middle of the pipe must be able to take up both ends of gravity, can achieve the purpose of physical exercise. The ball on the left side of the “dumbbell” can be considered as the upstream production industry of the natural gas industry chain. The middle pipe section is considered as the midstream storage operation industry, and the right ball is considered as the downstream utilization industry (as shown in Figure i). In the natural gas industry chain, the quantity of natural gas (production, transportation, and consumption) is a key factor in the development of the industry. When the three quantities are close to each other, the coordinated development of the natural gas industry can be ensured. Therefore, on the basis of the following assumptions, the author established a "dumbbell" model of the natural gas industry chain. The volume of the ball on the left represents the actual production capacity (annual output) of the upstream production industry, irrespective of other uncertainties. The volume of the right ball represents the actual demand capacity of the downstream utilization industry (annual consumption). 3) The volume of the middle pipe segment represents the midstream pipeline capacity (annual transmission capacity). 1.3 Model Construction 1.3.1 Production model of the upstream production industry It can be known from the production function in economics that the production volume is mainly related to the level of science and technology, capital investment, and the number of labor. As we all know, the natural gas upstream production industry does not belong to labor-intensive industries, and the upstream industry's production is mainly related to the level of science and technology and capital investment. The level of business management also has an impact on upstream production. Therefore, the author supposes that the output model of the upstream production industry in the "dumb-bell" model of the natural gas industry chain can be seen in terms of length or scale, and can also represent the capital input of the midstream industry. 1.3.3 Downstream use of industry consumption model Similarly, suppose the consumption model of the downstream utilization industry is greater than the capacity of the middle pipe segment (transport capacity of the middle pipeline), and larger than the volume of the right ball (downstream market consumption). This kind of "dumbbell" is so heavy that it can't fully play the basic role of dumbbells. If you use such dumbbells to exercise your body, you will not only get a better exercise effect, but also may hurt your wrists. In the same way, due to the excessive production of upstream natural gas, the scale of construction of middle-scale pipelines and the lack of development of downstream markets are insufficient to sustain and consume the production capacity of upstream gas fields, resulting in the development of gas fields, which not only affects the development opportunities of China's natural gas industry, but also restricts The progress of China's natural gas industry technology and management cannot give a good play to the natural gas industry's role in the national economy, people's lives, and the natural environment. For example, at that time, China Petroleum Southwest Oil & Gas Field Branch (formerly Sichuan Petroleum Administration Bureau) was the most important natural gas field in China. Excessive production capacity forced the company to adopt various preferential policies to promote the development of chemical plants and industrial gas companies in Sichuan and Chongqing. Seriously restricting the initiative and enthusiasm of natural gas upstream production and capital investment, the development of natural gas industry chain is very uncoordinated. 2.2 Incompatibility of the construction of the middle-stream pipeline and the development of upstream gas sources has affected the overall development of the natural gas industry In the late 1990s and early 2000s, the major domestic natural gas production enterprises responded to overcapacity and sold natural gas. The natural gas production companies took the initiative. Large-scale construction of pipelines, with various preferential policies to promote the development of markets along the pipeline. According to the dumbbell model, the formula for the development and strengthening of the pipeline transportation industry in the middle reaches is: Dumbbell pattern As shown in the figure, the capacity of the middle section of the dumbbell (tube volume) is much higher than the volume volume of the right sphere (downstream consumption). This role can not really play the role of dumbbells. At present, the natural gas pipeline network, the Shaan-Jing railway line, the Zhongwu line, and the West-East Gas Pipeline, which are currently under full-load operation, were rapidly constructed and developed under the prevailing conditions. Due to insufficient demand from the downstream utilization market, the pipelines at the initial stage of operation The annual output only accounts for about 50% of the design output and does not fully play the role of the pipeline system. This phenomenon also led to the lack of timely follow-up of the construction of gas storage facilities associated with natural gas pipelines, which in turn affected the current middle-stream pipelines. Hey. In the production industry, Buyou uses the safe, stable, and efficient operation of the “dumbbell” map system of the natural gas industry chain to control and influence the development and upgrading of the natural gas industry. At the same time, the rapid construction of the middle reaches of the pipeline has also given the upstream production industry an illusion of demand, but also led to the remaining surplus of upstream production capacity, and thus affect the overall development of the natural gas industry chain. 2.3 The rapid development of downstream utilization market, the contradiction between supply and demand has become increasingly serious, and progress has affected the coordinated development and upgrading of the industrial chain into the 21st century, especially in the last 5 years, with the increase in the government’s efforts to support natural gas consumption and the impact of domestic and international economic conditions and the public’s With the increase in awareness of natural gas, the natural gas utilization market has developed rapidly. According to the dumbbell model, the formula for the rapid development of the downstream market is: Experience and the road to sustainable development. The technological development of the middle reaches requires independent research and development of key equipment for storage operations, research and development of key technologies for gas storage, implementation of “digital” pipeline technologies, independent research and development and promotion of pipeline integrity technologies, independent research and development of SCADA systems and simulation software, and development and implementation of natural gas pipeline optimization. Reduced consumption technology, and so on. In terms of management innovation, it is necessary to continuously promote the interconnection and centralized regulation of natural gas pipelines, further promote the "threeizations" (standardization, modularization, and informationization), strengthen the management of the three bases (basic-level construction, basic work, and basic training), and strengthen the equipment. Facilities self-check self-checking self-education management mode. Downstream technological advancements need to implement and promote energy pricing methods, manage the natural gas demand side, establish and refine user ratings, and develop and establish electronic trading platforms. In terms of management innovation, it is necessary to promote the natural gas industry cluster development, allow and carry out natural gas spot trading mechanism, encourage the development of high-efficiency natural gas utilization projects such as natural gas distributed energy, and adjust the strategic management model of natural gas marketing. In addition, in the aspect of economic policy laws and regulations, it is also necessary to establish a central government energy management department, improve the legal and regulatory system, formulate a comprehensive development strategy for natural gas in China, improve the natural gas industry supervision, formulate economic incentive policies, and adjust the taxes and prices of each link of the natural gas industry chain. Progressive planning and improvement of natural gas utilization policies. 5 Conclusion The physical connection between the natural gas industry chain and the middle and lower reaches is similar to that of the “dumbbell” shape, so the natural gas industry chain can be compared to a “dumbbell”. In the natural gas industry chain, the quantity of natural gas (production, transportation, and consumption) is a key factor in the development of the industry. When the three quantities are close to each other, the coordinated development of the natural gas industry can be ensured. On the basis of three assumptions, this paper first established the "dumb-bell" model of the natural gas industry chain, and used the "dumb-bell" model to analyze the overcapacity in the upper reaches of the industrial chain, the expansion of the middle pipeline, and the development of the downstream market. At the same time, the model is used to analyze the conditions for the coordinated development of the industrial chain and the way to upgrade the industry. Raising the current sales price of natural gas is a key measure to ease the current unbalanced nature of the natural gas industry chain. We will vigorously promote scientific and technological progress and management innovation in the upstream, middle, and downstream sectors of the natural gas industry chain to promote the improvement of production efficiency in the upper, middle, and lower reaches. This is the main approach for the overall upgrade of the natural gas industry chain.

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