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International Futures Help System

Energy Equations Resources

Resource base is important in selected energy categories of IFs: conventional oil, natural gas, coal, hydroelectric power, and unconventional oil. Resources are not important in the "other renewable" category nor in the nuclear category, which represents an undefined mixture of burner, breeder and fusion power.

Resource costs, as represented by the capital required to exploit them, increase as resource availability in the resource-constrained categories decreases. The capital-to-output ratio captures the increased cost. Kalymon (1975) took a similar approach.

More specifically, the capital-to-output ratio (QE) increases in inverse proportion to the remaining resource base (as the base is cut in half, costs double; as it is cut to one fourth, costs quadruple). The model multiplies the initial capital output ratio by the initial resource base (RESOR) times a multiplier (RESORM) by which a model user can exogenously increase or decrease model assumptions. It then divides that product by initial resources minus cumulative produc"tion to date (CUMPR).


In the hydroelectric category, it is not cumulative production that is important, but rather the portion of resources used annually.


Cumulative production for gas and coal simply sums production across time, but for oil the production figures include conventional and unconventional; only the conventional fraction (ENPR) increments cumulative conventional production.


Production of unconventional oil begins in a significant fashion only after the conventional oil capital-to-output ratio increases to the point where it crosses the initial unconventional value. To that point cumulative production of unconventional oil (energy category 7) is zero. Thereafter the model caculates a portion of total oil and gas production (SENPR) that will come from unconventional sources. That portion increases as the cost of conventional oil production increases.


The actual level of unconventional production (ENPU) is the minimum of a figure computed from the relative costs of conventional and unconventional sources and a portion (PRODTF) of the remaining unconventional sources.


Conventional production (ENPC), if any, is the remaining production in the first energy category.


The portion of oil production that is conventional (SENPR), a variable used elsewhere, is straightforward.