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The price of secondary fossil fuels is a function of the 

 regional price of primary fuels and the cost of refining: 



Pjr = Pirteij) + h j 

 P ir = (Pi + TR ir ) TX ir 



Where: Pj r is the price of secondary fuel j in region r; 

 P]_ r is the price of primary fuel i in region r; 

 g-ji is the efficiency of refining i into j; hj is 

 the nonenergy cost of refining; Pi is the world 

 market price of fuel i; TRi r is the cost of 

 transporting fuel i to region r, and TXi r are 

 taxes on fuel i in region r. 



The demand for fuels to provide electric power is then 

 determined by the relative prices of the alternative electricity- 

 generating fuels. Likewise, the demand for synthetic oil and 

 gas from coal and biomass are functions of oil and gas prices. 

 Finally, production levels of primary energy sources are derived 

 from the demand for secondary fuels. 

 Energy Supply 



Three generic energy supply categories are distinguished: 

 resource-constrained conventional energy, resource-constrained 

 renewable energy, and unconstrained energy resources. There are 

 eight different supply modes across these categories, as shown 

 in Table B-2. Production of conventional gas and oil are repre- 

 sented by a logistics curve which reflects historical supply 

 levels and estimates of remaining deposits: 



F ( fc ) = exp(a + bt) 

 l-F(t) 



Where: F(t) is the cumulative fraction of the total resource 



exploited by time t, and a and b are empirical parameters. 



