Abstract for: Developing a Fair and Robust Energy Policy

We used a system dynamics model and statistical analysis to find an energy tax policy that is both fair and robust for all interested parties based on the assumptions made in this study. Regret analysis techniques were developed and used effectively to find a policy that minimized the losses of both the state and energy producer. The policy worked well under a wide range of uncertain future conditions and is effective when it is difficult or impossible to define or agree upon the probabilities of important events. Our goal in this work was to expand on ideas that were developed in our previous papers, as well as the work of other researchers in system dynamics, petroleum engineering and other disciplines. We focused our efforts on defining a policy development process, rather than on the potential complexities that might arise in real situations. However, we believe the approach described here can be adapted to more realistic situations. That will be the focus of future research. We hope that our techniques may eventually be used to find ways to encourage the development of new energy resources in a way that is both fair and beneficial to all parties.