| Author: | Fuller, J. D. Vickson, R. G. |
| Title: | The optimal timing of new plants for oil from the Alberta tar sands. |
| Journal: | Operations Research
1987 : SEP-OCT, VOL. 35:5, p. 704-715 |
| Index terms: | PETROLEUM INDUSTRY PRODUCTION PLANNING OPTIMAL CONTROL THEORY |
| Language: | eng |
| Abstract: | An optimal control model is used to analyse the problem of phasing in the vast but expensive tar sands resource to replace the dwindling supplies of conventional oil. The model minimizes the discounted total costs of meeting a specified future demand for oil by using oil from two possible sources: non-tar-sand-oil, called conventional oil, modeled as an exhaustible resource, whose marginal cost increases with cumulative extraction, and tar sands oil, modeled as a virtually inexhaustible resource i.e. a backstop, whose marginal cost is constant, but initially much higher than that of conventional oil, and whose extraction rate of increase is limited, representing a limit on constructions of new plants. |
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