Water Management Policies for the Energy Sector for North America



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Natural gas, characterized by its highly water-demand exploitation operation, has emerged as the predominant means of electricity generation in the United States. The utilization of this resource has conferred energy autonomy to the region while simultaneously unveiling the escalating water crisis, attributable to the substantial spatial concurrence between shale gas extraction plays and high water-stressed areas. This dissertation addressed those concerns by developing frameworks that allow evaluating water usage policies, seeking to control water over-exploitation derived from shale gas extraction. The contributions of this dissertation are the following. First, a market-based coupled framework was developed for regulating water use in natural gas markets. Second, water taxation strategies were proposed for the natural gas market, analyzing their effect and highlighting differences regarding a business-as-usual scenario. Third, a multi-stage stochastic mixed complementarity problem for the gas-electricity nexus considering renewables uncertainty was developed. This dissertation concludes that significant transformations must be done in terms of production, investment, and trade strategies in both gas and electricity markets to effectively account for the rising water crisis. Depending on how severe the enforced water taxation strategies are and how severe local water scarcity conditions are, those transformations could be major. The effect of renewables supply uncertainty can seriously impact the energy mix upon the enforcement of water-controlling policies, and they can even lead to the overuse of fossil fuels such as coal if a robust planning strategy is not considered. On the contrary, a stochastic planning approach can significantly smooth production strategies for both gas and electricity and greatly smoothen their prices.

Embargo status: Restricted until 09/2024. To request the author grant access, click on the PDF link to the left.



Sustainable Policies, Water magement, Water Scarcity, Renewable Uncertainty