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Abstract

Simple models of discounted cash flow can simulate production for coal mines with three different geometries: (1) uniform horizontal beds,

(2) horizontal beds with optional incremental seams, and (3) uniform dipping seams. The models assume that investors choose a constant rate and duration of production to maximize present worth. Examples show the effects of policy and economic changes on coal production for each model. The results show that changes which increase variable costs reduce the optimum rate and duration of production. Changes which increase fixed costs, however, do not affect the optimum rate of production but do reduce the ultimate recovery of coal.

Keywords

coal production economics energy,natural resources policy-making resource management

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References

Hultquist, P.F. Collier, R.S. Monash, E.A. Burzlaff, B.H. "Modeling As an Aid to Energy Policy and Planning" Proceedings of the Seventh Annual UMR-DNR Conference on Energy University of Missouri Rolla, Missouri 14-16 October 1980 pp. 163-172

Katell, S. Hemingway, E.L. "Basic Estimated Capital Investment and Operating Costs for Underground Bituminous Coal Mines" I.C. 8632 U.S. Department of the Interior

Washington, D.C.

1974

Pederson, J.A. Blair, T.J. Connors, F.W. Smith, M.T. "Coal Resource Economic Evaluation,"

presented at the SPE-AIME Eighth Hydrocarbon Economics and Evaluation Symposium Society of Petroleum Engineers of AIME

Dallas, Texas 11-13 February 1979 Reprint

Skelly And Loy, Inc. "Economic Engineering Analysis of U.S. Surface Coal Mines and Effective Land Reclamation" PB-254/315 U.S. Department of Commerce, Bureau of Mines Washington, D.C. February 1975

Simulating the Economics of Coal Production

Abstract

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