Decision Making in a Complex Environment

Decision Making in a Complex Environment

BQOM 2512

"Energy Security of the United States of America"

Using ANP with Dependence and Feedback

Final Report

April 6, 2004

Authors

Jose' D. Figueroa Daryl R. Wood

412-386-4966 724-265-3391

Jose.Figueroa@netl.doe.gov jswood@connecttime.net

1.0 Introduction:

There has been an ongoing debate in the United States of America ever since the Report of the National Energy Policy Development Group was submitted for consideration by Vice President Dick Cheney to the President of the United States of America, George W. Bush on May 16, 2001. The statements and recommendations of the report has been so controversial that senate and house committee meetings have been held along with requests that the Vice President come before Congress, since its public release, to explain what was discussed behind closed doors.

Energy is a pivotal factor in society and will continue in the future so long as humanity is driven to a materialistic end and develops technologies to meet those needs which are powered and constructed by energy. With the aforementioned said, we, as a nation, face a serious problem in the near future. How do we sustain the constant growth of the United States of America? What fuels will power our vehicles, heat our homes, and generated the electricity we have taken as an entitlement every time we flip the switch and the lights turn on?

The Analytical Network Process model titled, "Energy Security of the US", was developed to provide statistical support to our intuition and judgment based on our knowledge and expertise of the subject matter. The model takes into account all of the significant factors and forces that our intuition indicate would influence the direction of the United States of America Energy Policy. This model was not designed to justify the aforementioned National Energy Policy submitted by Vice President Cheney, but to determine which of four alternatives provide the US the best direction to secure its future. Those four alternatives are:

1. Status Quo Approach

2. Energy Independence Emphasis

3. Complete Energy Independence

4. Comparative Advantage Approach

The ANP model has four feedback sub-networks of control criteria called Benefits, Opportunities, Costs, and Risks (BOCR). All four sub-networks have control criteria clusters that are specific to the BOCR which are elaborated and shown within this report. Each control criteria cluster may have one or two level subcriteria clusters that are also specific to the parent node, cluster and sub-network. An alternatives sub-network is located on the top 70% priority nodes within each BOCR sub-network that is also specific to the issue being addressed at that point in the model. In addition, we have also developed a strategic rating criteria model to address the question, "What direction should the United States energy policy provide ?" to weigh the BOCR against the strategic control criteria identified as Energy Security, International Competitiveness, and Environmental Quality.

2.0 Background:

There are many reports, papers, studies and presentations that exist which state, not if, but when the world and the US will be in an energy crisis. This statement in itself should be enough to keep you up at night thinking about what will "our way of life" be in ten or 20 years. We do not preach gloom or doom but wish to simply state some of the facts that have been presented by experts in the energy industry.

The National Energy Policy report mentioned in the introduction provides a clear picture, Figure 1, of what is happening and forecasted for the USA.

Figure 1 Growth in the U.S. Energy Consumption Is Outpacing Production

The energy consumption of the United States is and will outpace domestic energy production significantly