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Integrating climate forecasts and natural gas supply information into a natural gas purchasing decision

Published online by Cambridge University Press:  23 November 2000

David Changnon
Affiliation:
Meteorology Program, Department of Geography, Northern Illinois University, DeKalb, IL 60115, USA
Michael Ritsche
Affiliation:
Meteorology Program, Department of Geography, Northern Illinois University, DeKalb, IL 60115, USA
Karen Elyea
Affiliation:
Meteorology Program, Department of Geography, Northern Illinois University, DeKalb, IL 60115, USA
Steve Shelton
Affiliation:
Meteorology Program, Department of Geography, Northern Illinois University, DeKalb, IL 60115, USA
Kevin Schramm
Affiliation:
Meteorology Program, Department of Geography, Northern Illinois University, DeKalb, IL 60115, USA
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Abstract

This paper illustrates a key lesson related to most uses of long-range climate forecast information, namely that effective weather-related decision-making requires understanding and integration of weather information with other, often complex factors. Northern Illinois University's heating plant manager and staff meteorologist, along with a group of meteorology students, worked together to assess different types of available information that could be used in an autumn natural gas purchasing decision. Weather information assessed included the impact of ENSO events on winters in northern Illinois and the Climate Prediction Center's (CPC) long-range climate outlooks. Non-weather factors, such as the cost and available supplies of natural gas prior to the heating season, contribute to the complexity of the natural gas purchase decision. A decision tree was developed and it incorporated three parts: (a) natural gas supply levels, (b) the CPC long-lead climate outlooks for the region, and (c) an ENSO model developed for DeKalb. The results were used to decide in autumn whether to lock in a price or ride the market each winter. The decision tree was tested for the period 1995-99, and returned a cost-effective decision in three of the four winters.

Type
Research Article
Copyright
© 2000 Cambridge University Press

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