Grey Predictive on Natural Gas Consumption and Production in China

Abstract

China's consumption and production of natural gas have been rising steadily since the government set a target of raising the proportion of natural gas in total energy consumption to 5.3 percent by 2010 from 2.8 percent in 2005. China's production of natural gas rose 12.3 percent year on year to 76.1 billion cubic meters in 2008 as the government promoted cleaner energy, and China consumed 67.3 billion cubic meters of gas in 2007, an annual increase of 19.9 percent. The dynamic GM(1,1) model of grey theory is used to forecast the natural gas consumption and production in China. In order to improve the forecast accuracy, the original GM(1, 1) models are improved by using Markov-chain. We analyze the data of the natural gas consumption and production from 1990 to 2007 in China, and forecast China’s natural gas consumption and production by this Grey-Markov forecasting model, which shows that the improved grey forecasting model is of more reliability and higher forecast accuracy than GM (1, 1).