Released December 2002
(Next Release:
November 2003)

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Coal Market Module (CMM)

Description:

The CMM has three submodules. The Coal Production Submodule produces supply-price relationships for 12 coal types and 11 producing regions, addressing the relationship between the minemouth price of coal and corresponding levels of coal production, labor productivity, and the cost of factor inputs (mine labor, mining equipment, and fuel). The model serves as a major component in the National Energy Modeling System (NEMS). The purpose of the model is to produce annual domestic coal supply curves for the mid-term (to 2020) for the Coal Distribution Submodule of the Coal Market Module of NEMS

Coal Distribution Submodule — United States coal production, national and international coal transportation industries. The model is used to forecast annual coal supply and distribution to domestic markets

Coal Distribution Submodule (International Coal Flows) — The international component of the CDS projects coal trade flows from 16 coal-exporting regions (five of which are in the United States) to 20 demand or importing regions (four of which are in the United States) for three coal types — premium bituminous, low-sulfur bituminous, and subbituminous. The model consists of supply, demand, trade and transportation components. The major coal exporting countries represented include: United States, Australia, South Africa, Canada, Indonesia, China, Columbia, Venezuela, Poland, and the countries of the Former Soviet Union. The model is used to forecast international coal trade. It provides U.S. coal export forecasts to the domestic component of the Coal Distribution Submodule.

Last Model Update:

November 2000

Part of Another Model?

Part of the National Energy Modeling System (NEMS).

Sponsor:

  • Office: Office of Integrated Analysis and Forecasting
  • Division: Coal and Electric Power Division
  • Model Contact: Michael Mellish
  • Telephone: (202) 586-2136
  • E-Mail Address: Michael.Mellish@eia.doe.gov

Documentation:

  • Coal Production Submodule (CPS):
    • Energy Information Administration, Model Documentation, Coal Market Module of the National Energy Modeling System, Part I, DOE/EIA-M060 (01) (Washington, DC, January 2001)
  • Coal Distribution Submodule (CDS):
    • Energy Information Administration, EIA Model Documentation, Coal Market Module of the National Energy Modeling System, Part II-A, DOE/EIA-M060 (01) (Washington, DC, January 2001)
  • Coal Distribution Submodule (CDS) (International Coal Trade):

Archive Media and Installation Manual(s):

See Integrating Module for the National Energy Modeling System (NEMS).

Coverage:

Coal Production Submodule (CPS):

  • Geographic: Supply curves for 11 geographic regions
  • Time Unit/Frequency: 1990 through 2020
  • Product(s): 12 coal types
  • Economic Sector(s): Coal producers and importers.

Coal Distribution Submodule (CDS):

  • Geographic: United States, including Hawaii, Puerto Rico, and the U.S. Virgin Islands
  • Time Unit/Frequency: Annual forecasts for 1990-2020
  • Product(s): Bituminous, subbituminous and lignite coals in steam and metallurgical coal markets
  • Economic Sector(s): Forecasts coal supply to 2 residential/commercial, 3 industrial, 2 domestic metallurgical, 4 export, and 7 electric utility subsectors (a synthetic fuel subsector is present but not operational in the CDS) to 13 domestic demand regions.

Coal Distribution Submodule (CDS) (International Coal Flows):

  • Geographic: 16 export regions (5 of which are in the United States) and 20 import regions (4 of which are in the United States)
  • Time Unit/Frequency: Each run represents a single forecast year. Model can be run for any forecast year for which input data are available
  • Product(s): Coking, low-sulfur bituminous coal, and subbituminous coal
  • Economic Sector(s): Coking and steam.

Modeling Features:

Coal Production Submodule (CPS):

  • Model Structure: The CPS employs a regression model to estimate price-supply relationships for underground and surface coal mines by region and coal type, using projected levels of production, productivity, miner wages, capital costs of mining equipment, and fuel prices
  • Modeling Technique: Three main steps are involved in the construction of the coal supply curves:
    • Calibrate the regression model to base-year production and price levels by region, mine type (underground and surface), and coal type
    • Convert the regression equation into supply curves
    • Construct step-function supply curves for input to the CDS

Coal Distribution Submodule (CDS):

  • Model Structure: The CDS uses 35 coal supply sources representing 12 types of coal produced in 11 supply regions. Coal shipments to consumers are represented by transportation rates specific to NEMS sector and supply curve/demand region pair, based on historical differences between minemouth and delivered prices for such coal movements. In principle there are 8,190 such rates for any forecast year; in practice there are less since many rates are economically infeasible. Coal supplies are delivered to up to 18 demand sectors in each of the 13 demand regions. A single model run represents a single year, but up to 31 consecutive years (1990-2020) may be run in an iterative fashion. Currently, the NEMS system provides demand input for the 1990-2020 period
  • Modeling Technique: The model utilizes a linear programming that minimizes delivered cost to all demand sectors
  • Special Features:
    • All demands are exogeneous to the CDS
    • Supply curves (there are 35 supply sources) depicting the U.S. coal reserve base are exogenous to CDS and are reported in the CDS from 11 coal supply regions
    • CDS currently contains no descriptive detail on coal transportation by different modes and routes. Transportation modeling consists only of sector-specific rates between demand regions and supply curves that are adjusted annually for changes in factor input cost changes, the producer price index for transportation equipment, and a time trend
    • CDS output includes tables of aggregated output for NEMS system and approximately 20 single-year reports providing greater regional and sectoral detail on demands, production distribution patterns, and rates charged.
    • Coal imports are treated as a static input that is subtracted from demand before solving the CDS. Imports are reported to NEMS and detailed in some single-year reports
    • CDS reports minemouth, transport, and delivered coal prices, coal shipment origins and destinations (by region and economic sub-sector), and energy and sulfur content of coal

Coal Distribution Submodule (CDS) (International Coal Trade):

  • Model Structure: Satisfies coal import demands at the lowest cost based on specified supply and transportation costs, and subject to projected overall levels of available coal export capacities by region and by coal type
  • Modeling Technique: The model is a Linear Program (LP), which satisfies demands at all points at the minimum overall "world" coal cost plus transportation cost and is embedded within the Coal Market Module
  • Special Features: The model is designed for the analysis of legislation concerned with SO2 emissions and trade of nonconventional coals (subbituminous coals).

Non-DOE Input Sources:

Coal Production Submodule (CPS):

  • U.S. Department of Labor, Bureau of Labor Statistics
    • Average Hourly Earnings of Production Workers (Coal Mining), Series ID: EEU10120006
    • PPI for Mining Machinery and Equipment, Series ID: PCU3532#
  • DRI/McGraw Hill
    • Yield on Utility Bonds

Coal Distribution Submodule (CDS):

  • U.S. Department of Commerce
    • Form EM-545
  • U.S. Department of Commerce
    • Form IM-145
  • Association of American Railroads (Washington, DC, quarterly)
    • AAR Railroad Cost Indices
  • Rand McNally and Co. (Chicago, IL, 1988)
    • Handy Railroad Atlas of the United States
  • Caplan, Abby, et al, eds. (Washington, DC, 1996)
    • 1996-1997 Fieldston Coal Transportation Manual

Coal Distribution Submodule (CDS) (International Coal Flows):

  • SSY Consultancy and Research, McClosky Coal Information, Ltd., and the International Energy Agency. Published trade and business journal articles, including Coal Week International, Energy Publishing, LLC's International Coal Trade, Financial Times International Coal Report, and World Coal
    • Coal Import Demands
    • Coal Supply Curves
    • Diversity Constraints
    • Ocean Freight Rates
    • Sulfur Emission Constraints
    • Subbituminous and High-Sulfur Coal Constraints.

DOE Data Input Sources:

Coal Production Submodule (CPS):

  • Energy Information Administration, Forms EIA-3, EIA-3A, EIA-5, EIA-5A, EIA-6A, and EIA-7A
    • Historical data for the regression model used for estimating coal supply curves
    • Base year values for U.S. coal production, productivity, and prices
    • Heat and sulfur content averages, and carbon emission factors by supply curve
  • Energy Information Administration, Electric Power Annual 1998, Volume II (DOE/EIA-0348(99) (Washington, DC, October 1999)
    • Base year electricity prices and wages
  • Energy Information Administration, State Energy Price and Expenditure Report 1997 (DOE/EIA-0214(97) (Washington, DC, September 1999).
    • Historical electricity prices for the regression model used for estimating coal supply curves.
  • Federal Energy Regulatory Commission
    • FERC Form-423 database

Coal Distribution Submodule (CDS):

  • Data Sources:
    • Form EIA-3, Quarterly Coal Consumption Report, Manufacturing Plants
    • Form EIA-5, Coke Plant Report Quarterly
    • Form EIA-6A, Coal Distribution Report
    • Form EIA-7A, Coal Production Report
    • FERC Form 423, Monthly Report of Cost and Quality of Fuels for Electric Plants
    • FERC Form 580, Interrogatory on Fuel and Energy Purchase Practices
  • Physical: Forecasts of annual coal supply tonnages (and trillion Btu) by economic sector and subsector, coal supply region, coal Btu, sulfur content, and demand region
    • Demand shares by sector and region: (1) residential/commercial (trillion Btu); (2) industrial steam coal (trillion Btu); (3) industrial metallurgical coal (trillion Btu); (4) import supplies (millions of short tons)
    • Coal supply/transportation contracts: (1) coal supply regions; (2) coal demand regions; (3) coal quality (Btu and sulfur content); (4) contract annual volumes (trillion Btu); (5) contract expiration dates (forecast year)
    • Coal quality data for supply curves: (1) million Btu per short ton: (2) lbs. sulfur per million Btu
    • Coal quality specifications for regional subsectoral demands on electricity generation and other sectors
  • Economic: Forecasts of annual minemouth, transportation, and delivered coal prices by coal type, economic sector, coal demand, and supply regions
    • Supply curves relating minemouth prices to cumulative production levels
    • Transportation rates: (1) 1987 dollars per short ton; (2) specified by subsector, differ by sector; (3) differ also by supply and demand region pair
    • Transportation rate escalation factors: (1) exogenous; (2) based on estimates of factor input costs (labor, fuel, etc.); (3) used to adjust for productivity change
    • Minemouth price adjustments: (1) can be made by supply region and forecast year; (2) currently used only by forecast year; (3) used to escalate and de-escalate transportation rates for forecast year
    • Transportation rate adjustments: (1) can be used by demand sector and demand region; (2) derived from off-line program that subtracts base year minemouth costs from delivered costs reported in Forms EIA-3 and -5, and FERC Form 423 to produce transport rate, calculates ratio between model rate and rate from forms, preserve ratio as model parameter; (3) used to calibrate rates in model

Coal Distribution Submodule (CDS) (International Coal Trade):

None.

Computing Environment:

See Integrating Module of the National Energy Modeling System.