p.1 

OAR Box 1828 

Prepped by Ollie Stewart 

Document Number: 

112) ll-K-(B)-101 

Docket Number: 

A-83-27 

Printed 11/12/200811:12:52 AM Sheet 112 of 325 
B 

P.2 

•S^S^ ^ ENERGY AND ENVIRONMENTAL ANALYSIS, INC. A-83-27 

II-K-(B)-101 

April 5, 1983 

Mr. Robert Short 

Economic Analysis Branch 

U.S. Environmental Protection Agency 

Mail Drop-12 

Research Triangle Park, NC 27711 

Subject: EPA Contract No. 68-02-3564, Work Assignment #9 

Dear Robert: 

Enclosed are the proposed industrial fossil fuel price projections for 

the industrial boiler NSPS SO- impact analysis. The natural gas and 

fuel oil price projections have been derived from unpublished background 

data for a recent DOE analysis of natural gas wellhead price deregulation proposals. The coal price forecasts are the current (industrial 

boiler NSPS PM/NO impact analysis) projections in IFCAM. 

Sincerely, 

r 

Tim Hogan 

TH:mk 

Enclosure 

cc: Al Wehe 

Economics / Engineering 
P.3 

PROPOSED INDUSTRIAL FOSSIL FUEL PRICE 

PROJECTIONS FOR THE INDUSTRIAL 

BOILER NSPS S02 IMPACT ANALYSIS 

Prepared for: 

U.S. ENVIRONMENTAL PROTECTION AGENCY 

Office of Air Quality Planning and Standards 

Research Triangle Park, North Carolina 27711 

Prepared by: 

ENERGY AND ENVIRONMENTAL ANALYSIS, INC, 

1111 North 19th Street 

Arlington, Virginia 22209 

April 4, 1983 
P.4 

TABLE 1. WORLD OIL PRICE FORECAST3 

(1982 $/bbl) 

Average Refiner's 

Acquisition Cost of 

Year Imported Crude Oil 

1985 31.48 

1990 32.75 

3Increases at 1.0 percent annually in real terms. U.S. Department of 

Energy. Analysis of Natural Gas Consumer Regulatory Reform Legislation, 

February 28, 1983. p. 14. Derived from the fiscal year 1984 budget. 
P.5 

TABLE 2. DISTILLATE FUEL OIL PRICE-FORECAST 

(1982 $/MMBtu) 

Demand 

Region 

1. New England 

2. New York/New Jersey 

3. Middle Atlantic 

4. South Atlantic 

5. Midwest 

6. Southwest 

7. Central 

8. North Central 

9. West 

10. Northwest 

1985 

6.94 

6.93 

6.93 

6.90 

6.79 

6.69 

6.70 

6.63 

6.69 

6.69 

1990 

7.25 

7.24 

7.24 

7.21 

7.10 

6.99 

7.01 

6.94 

6.99 

6.99 

1995 

7.57 

7.57 

7.57 

7.53 

7.42 

7.31 

7.33 

7.26 

7.31 

7.31 

19993 

7.85 

7.84 

7.84 

7.80 

7.69 

7.58 

7.60 

7.53 

7.58 

7.58 

aRemains constant in real terms after 1999, 
P.6 

TABLE 3. RESIDUAL FUEL OIL PRICE FORECAST3 

(1982 $/MMBtu) 

Demand 

Region 

1. New England 

2. New York/New Jersey 

3. Middle Atlantic 

4. South Atlantic 

5. Midwest 

6. Southwest 

7. Central 

8. North Central 

9. West 

10. Northwest 

1985 

5.37 

5.37 

5.37 

5.37 

5.46 

5.07 

5.39 

5.32 

5.37 

5.37 

1990 

6.21 

6.21 

6.21 

6.29 

6.21 

6.22 

6.24 

6.16 

6.21 

6.21 

1995 

7.19 

7.19 

7.19 

7.19 

7.28 

7.19 

7.21 

7.14 

7.19 

7.19 

1999b 

7.61 

7.61 

7.61 

7.61 

7.69 

7.61 

7.62 

7.55 

7.61 

7.61 

Low sulfur, 0.3 percent sulfur. 

0.8 percent sulfur = 0.3 percent sulfur - $0.33/MMBtu. 

1.6 percent sulfur = 0.3 percent sulfur - $0.68/MMBtu. 

3.0 percent sulfur = 0.3 percent sulfur - $1.13/MMBtu. 

Remains constant in real terms after 1999. 
TABLE 4. NATURAL GAS PRICE FORECAST 

(1982 $/MMBtu) 

P.7 

Demand 

Region 

1. New England 

2. New York/New Jersey 

3. Middle Atlantic 

4. South Atlantic 

5. Midwest 

6. Southwest 

7. Central 

8. North Central 

9. West 

10. Northwest 

1985 

5.11 

5.11 

5.11 

5.11 

5.20 

4.82 

5.13 

5.06 

5.11 

5.11 

1990 

5.94 

5.94 

5.94 

5.94 

6.03 

5.94 

5.96 

5.89 

5.94 

5.94 

19953 

6.59 

6.59 

6.59 

6.59 

6.67 

6.59 

6.60 

6.54 

6.59 

6.59 

Increases after 1995 at 1.0 percent annually. 
P.8 
P.9 

TABLE 

Supply Region 

Northern Appalachia 

N. 

Central Appalachia 

Southern Appalachia 

Midwest 

Central West 

Western Northern 

Great Plains 

Rockies 

Southwest 

5. F.O.B. MINE COAL 

(1982 $/MMBtu) 

lb. S02/MMBtu 

6.00. 

3.41? 

2.30° 

3.77. 

2.29° 

2.75. 

1.72° 

1.71. 

1.35° 

5.04, 

3.55° 

4.05. 

2.94° 

2.77. 

1.77° 

1.73, 

1.30° 

1.25. 

1.15° t—' t—• 

o ro 

cn to 

cr 

2.27 

8.90. 

5.34° 

4.75. 

2.97° 

2.75 

3.78 

13.04. 

7.99° 

5.99 

2.50 

1.67 

0.87 

1.85 

1.27, 

1.17° 

1.51 

PRICES0 

1985 

1.35 

1.54 

1.68 

1.54 

1.82 

1.81 

1.96 

2.17 

2.56 

1.54 

1.72 

1.56 

1.83 

1.72 

2.02 

1.93 

2.29 

1.96 

2.25 

1.97 

2.09 

1.68 

1.18 

1.46 

1.50 

1.74 

1.83 

1.60 

1.40 

1.93 

1.42 

0.65 

0.71 

0.76 

0.97 

0.97 

1.14 

0.96 

* 

1990 

1.60 

1.81 

1.97 

1.71 

2.00 

2.00 

2.15 

2.35 

2.75 

2.09 

2.31 

2.09 

2.42 

2.14 

2.47 

2.20 

2.59 

2.21 

2.52 

2.21 

2.32 

2.47 

1.42 

1.72 

1.78 

2.03 

2.15 

1.93 

1.56 

2.11 

1.83 

0.65 

0.71 

0.76 

1.21 

1.21 

1.40 

1.08 

1995c 

1.79 

2.02 

2.18 

1.90 • 

2.22 

2.25 

2.42 

2.67 

3.11 

2.15 

2.38 

2.17 

2.50 

2.50 

2.86 

2.50 

2.93 

2.50 

2.84 

2.50 

2.63 

3.20 

1.56 

1.86 

1.95 

2.21 

2.34 

2.04 

1.71 

2.31 

1.92 

0.71 

0.74 

0.76 

1.33 

1.33 

1.54 

1.33 

Based on forecasts from EIA's Midterm Energy Forecasting System and the 

National Coal Model. 

Run-of-mine coal price plus physical coal cleaning costs. 

'Increases after 1995 at the average 1985-1995 annual rate. 
Demand 

Region (City) 

1. NE (Boston) 

2. NY/NJ (New York) 

3. MA (Bait.-Phi 

4. SA (Atlanta) 

5. MW (Chicago) 

6. SW (Houston) 

la.) 

7. C (Kansas City) 

8. NC (Denver) 

9. W (San Francisco) 

10. NW (Seattle) 

aU.S. Department 

rate estimates. 

Annual Report to 

TABLE 6. 1985 

Northern 

Appalachia 

33.64 

24.42 

16.90 

32.67 

20.53 

62.23 

36.72 

59.56 

112.84 

97.40 

of Energy, Energy 

Increase at 3.4 | 

Congress 1980). 

INDUSTRIAL COAL TRANSPORTATION COSTS' 

(1982 $/ton) 

Coal 

Central Southern 

Appalachia Appalachia 

33.42 

24.20 

16.69 

16.32 

22.64 

47.07 

34.67 

57.50 

110.78 

99.51 

Information 

jercent annu 

48.97 

41.14 

33.64 

9.35 

30.76 

29.15 

30.54 

53.38 

104.90 

107.63 

Supply Region 

Midwest 

49.46 

40.25 

32.73 

29.43 

13.75 

44.30 

19.27 

42.10 

' 95.40 

90.61 

Administration, Midterm 

ally in real terms un/itl 

Central 

West 

63.45 

54.25 

46.73 

35.68 

19.92 

31.78 

3.73 

26.56 

79.84 

83.62 

i 

W N. 

Great Plains 

91.10 

81.88 

76.05 

69.90 

46.05 

54.57 

37.95 

15.11 

68.39 

51.54 

Energy Forecasting System. 

1990 and thereafter remain 

Rockies 

95.81 

86.60 

79.08 

68.03 

52.26 

52.69 

36.07 

13.23 

46.95 

56.46 

Singleconstant 

Southwesi 

104.00 

94.80 

87.28 

63.01 

65.23 

42.85 

49.04 

26.20 

62.74 

86.46 

car rail 

(EIA's 
COAL SUPPLY REGIONS 

x> 

. - J 

t 

f 

J" 

V / 

' 

I f 

\ * 

' \ ' 

t 

1 Noilliem AppaLicJiia 

2 Central Appalachia 

3 Southern Appalachia 

\ Midwesl 

5 Central West 

6 Gulf 

REGIONS 

7 Eastern Northern Great Plains* 

8 Western Northern Great Plains 

9 Rockies 

10 Southwest 

11 Northwest* 

12 Alaska (Not shown)* 

* Heitivfcs lium these regions are not included in IFCAM.