Modeling U.S. Coal zy ed NM Export Planning Decisions zy cb JIH Michael Kuby,* Samuel Ratick,**and Jeffrey Osleeb*** *Department of Geography, Arizona State University, Tempe, AZ zyx FE 85287 **Center for Technology, Environment, and Development and Graduate School of Geograp Clark University, Worcester, M A 01610 ***Department of Geography, Hunter College, New York, NY 10021 Abstract. This paper develops a network- optimization planning methodology for U.S. coal port infrastructure. The model analyzes the economic and geographic impacts of har- bor deepening and offshore topping-off, im- provements which are considered essential for the U.S. to maintain export levels in the face of lower-cost competition because they en- able loading of the largest coal supercolliers. The Coal logistics System (COLS) is a mixed- integer programming model that captures the interaction between coal types and origins, rail and barge networks, ports and intermodal terminals, economies of scale in ocean ship- ping, foreign demand for steam and metal- lurgical coal, and environmental regulation. Model results provide the optimal set of coal flows for minimizing the costs of producing, transporting, and transshipping coal. A base case i s calibrated for 1985 in which the model predicts the throughput at each of five major ports within zyxwvut CBA 10 percent of actual historical lev- els. Four scenarios evaluate the effects of dredging at Baltimore and Norfolk harbors and of an offshore topping-off facility in Delaware Bay on the basis of systemwide cost savings and interport competition. Scenario results indicate that coal traffic alone is sufficient to justify the channel deepening work recently completed at Norfolk or underway at Balti- more, but perhaps not both. The alternative of off shore topping-off of light-loaded super- colliers merits further study. The research demonstrates the applicability of optimization models for analyzing marginal supply regions, geographic and product competition,inter- modal competition, competition for port forelands, traffic diversions between port hin- terlands, and concentration of traffic. Key Words: coal exports, mathematical program ming, hinterlands, dredging, scenarios. HE U.S. ranks second behind Australia among the coal-exporting countries of the world, having exported 100 million tons in 1988 (U.S. EIA 1991). The extent of the US. export trade is the result of i t s reliability and i t s capacity as a supplier rather than i t s low cost. The delivered cost per ton for U.S. coal exports is higher than for its major competitors: Australia, South Africa, Poland, Canada, and Colombia (Gordon 1987; “U.S. Coal” 1988). Re- cently, attention has focused on reducing ocean transport costs to make U.S. coal more com- petitive. Specifically, until as recently as De- cember 1988 when a fifty-foot-deep outbound channel was finally completed at Norfolk, the entire Eastern half of the U.S. lacked any deep draft ports that could accommodate coal “su- percolliers,” and many in the industry have ad- vocated government investment in channel dredging to help the U.S. compete with the other major exporters, all of which have deep draft ports (“U.S. Ports” 1988). Supercolliers, the coal equivalent of oil supertankers, can car- ry several times more coal at a much lower cost per ton than the types of vessels currently ser- vicing the East Coast. Port deepening projects now completed, underway, or under study at every major port from New York to New Or- leans may not all be economically justified. This study analyzes the economic effects of various harbor dredging investment scenarios in terms of the potential cost savings and the resulting expansion or contraction of port hinterlands, using an optimization model called the Coal Logistics System (COLS) developed for the US. Annals of the Association of American Geographers, 81(4), 1991, pp. 627-649 zy 0 Copyright 1991 by Association of American Geographers