Insufficient supply in a natural gas distribution system: A risk analysis

Regulatory authorities required a Canadian natural gas distribution company to assess the adequacy of its facility design and inventory policies by determining the likelihood of a shortage of natural gas for residential heating and industrial applications during a winter season. The problem was addressed by defining relevant probability measures and formulating a stochastic, computer-based model. The model was used to calculate these probabilities for policies of purchasing discretionary gas to supplement initial inventory and contractual deliveries and/or policies of temporary interruption of selected customers.