24 September 2012

Adelaide Group 2:

THIEN HUONG Do

MINH THUAN Nguyen

THI TAM Duong

OUTLINE 1.  Executive summary 2.  Summary of Decisions 3.  Description of Context 4.  Stakeholder Analysis 5.  Decision Criteria and Metrics 6.  Data/Facts/Modelling 7.  Analysis of Alternatives 8.  Recommendations 9.  Sensitivity Analysis

�Executive Summary�

•  Background: The case represents the ANWR

dispute between natural resource development advocates and proponents of wilderness protection.

•  Implication: The decision will have strong impact on consumers’ behaviours and reduce the oil consumption.

•  Recommendations: Apply higher fuel efficiency standards

What solutions should be taken to reduce oil consumption?

Summary of Decisions We stand on the position of environmentalists

•  Drilling Proponents: Took advantage of Policy

Window, capitalized on focusing events, called for drilling under the name of job creation and national defence

•  Drilling Opponents: Highlighted the self-interest motives and disguided huge profits, re-estimated the economic and security values and the catastrophic ecological impact of oil development in the refuge.

•  Congress: Integrated ANWR in legislation process

Description of Context 1980 1986 1987 1989 1990 1991 1995 1997 2003-2004 2005 2007

Congress enacted ANILCA which triggered the debate. GULF WAR

EIS was circulated by Interior Department

7 bills about ANWR development Approved ANWR oil and gas leasing bill

1st Energy Crisis

Revised estimate of finding oil in ANWR; October: prohibit drilling

Opening refuge is assumed

Artic Power has contract with Washington D.C

Two sides rely on experts’ analysis

President Obama approved an increase in CAFE standard 2nd Energy Crisis

Policy window: Approval of ANWR

Year of big events

Stakeholder Analysis Stakeholders  Groups   Representa2ves   Goals  

Drilling  opponents   •  Alaska  Coali*on  •  Environmental  groups  •  Supporters/  Allies  •  Gwich’in  Eskimos  •  Canadian  government  

•  Conserve  the  wilderness  of  Alaska  •  Protect  environment  and  wildlife  

habitat  

Drilling  proponents   •  Oil  and  gas  companies  •  Inupiat  Eskimos  •  Lobbying  organiza*ons  •  Auto  industy    •  Electric  U*li*es    

•  Earn  more  profit    •  Preserve  na*onal  security  •  Boost  economy  •  Minimize  oil  reliance    •  New  jobs  crea*on  •  Ease  federal  deficit  

Governments   •  State  government  •  Interior  Department  •  Congress  

•  Generate  more  revenue    •  Protect  environment    •  Stabilize  na*onal  energy  demand  and  

supply    

Americans   •  American  consumers   •  Low  prices  for  oil  and  gas  •  Increase  fuel  efficiency  •  Support  renewable  energy  

Decision Criteria and Metrics

Decision criteria Justifications Metrics

1.Environmental conservation

•  Reserve the geographical diverse of ANWR

•  Reduce the impacts from oil exploitation and side-effects on nature

•  Number of acres •  No. of wildlife animals •  No. of affected trees and animals •  Environmental indexes (air,

water…)

2. Economic development

•  Creating jobs •  Increase domestic oil production •  Enhance national security

•  No. of new jobs •  Revenue streams •  Contribution to federal/state

budget per year •  Oil gallon produced per year •  Oil gallon imported per year

3. Political dimensions

•  Conservation of ANWR would please those who advocate environment

•  Opening drilling would make those who support oil companies happy

•  No. of Senates approved •  No. of Senates disapproved

4. Public attitudes

•  Americans’ interests towards environmental issues and oil consumption

•  No. of public polls •  Gallon of oil and gas consumed

yearly

(Our analysis based on the following indices of performance)

Data/Facts/Modelling We analyze the fact based on environmentalists' viewpoints. •  P: Probability of

Alternatives •  U: Utility Value of

Alternative •  PnUn: Total sum of

multiple of utility value and probability of each alternative

The best option will have the highest utility values

Determine weight of factors for decision making

Environmental conservation

Economic development

Political dimensions

Public attitudes

Analysis of Alternatives Alternative 1: Apply higher fuel efficiency standards

o  Reduce the total gas consumption

o  Change consumers’ behaviour to energy consumption

Alternative 2: Invest in renewable energy technologies

o  Reduce the oil reliance on foreigners

o  Reduce the burden on domestic oil exploitation

Alternative 3: Mobilize public participation about

environment

o  Based on the major events and proactive media involvement

MAUT Analysis Alternatives

p1 U1 p2 U2 p3 U3 p4 U4 PnWn

Environmentalists

1 0.95 1 0.4 0.6 0.5 1 0.8 0 1.99

2 0.95 0 0.4 1 0.5 0.8 0.8 0.8 1.44

3 0.95 0.8 0.4 0 0.5 0 0.8 1 1.56

Oil and gas industry

1 0.5 0 0.95 1 0.6 1 0.5 0 1.55

2 0.5 0.2 0.95 0.2 0.6 0 0.5 0.7 0.64

3 0.5 1 0.95 0 0.6 0.3 0.5 1 1.18

Politicians

1 0.5 1 0.5 0.7 0.95 1 0.7 0 1.8

2 0.5 0 0.5 1 0.95 0 0.7 0.4 0.78

3 0.5 0.2 0.5 0 0.95 0.5 0.7 1 1.275

Best possible alternative: Alternative 1 (Apply higher fuel efficiency standards)

Recommendations

•  We should apply higher fuel efficiency standards

(Alternative 1)

–  Prepare strong back up by reliable and scientific data

–  Before employing the new fuel efficiency standards, surveys about

possible reaction should be carried out.

–  Campaigns to educate/change consumer behaviours should be made a

national focus and intensively involve media.

–  It also needs supports and commitment from different government

levels.

Sensitivity Analysis •  Auto and Energy Industries might shake hand to fight against

unfavourable Industry standards (E.g: CAFE) •  American may strongly oppose to the new requirement about

fuel efficiency. •  The Utility Model based on the subjective approach from

environmentalists’ perspective. It may generate different results from others’ point of views.

•  The recommendation may be challenged if not being backed up by scientific and reliable statistic data.

Thank  you!