A new model graph called fuzzy cause-effect digraph (FCDG) is proposed. This model expresses quantitative deviations of variables from the normal values with fuzzy set. It uses dynamic constraints (confluences) which are converted to dynamic fuzzy relations to express the dynamic gain between the variables in a chemical process. This replaces the steady-state gain between the variables originally expressed with a "+", "-", or "0" by signed directed graph (SDG). Using this FCDG model would eliminate spurious interpretations attributed to system compensations and inverse responses from backward loops and forward paths in the process. The basic idea and development of this proposed method are described in this paper. Moreover, this method can apply fuzzy reasoning to estimate the states of the unmeasured variables, to explain fault propagation paths, and to ascertain fault origins. The algorithm of fault diagnosis and its application proposed in this paper are described in part 2.