North American Crude Oil Model – NACOM
We have developed a partial equilibrium network model for the North American crude oil market, coined NACOM. The continent has experienced massive growth in both light and heavy oils since 2009, which has led to a greater load on the transportation network. Rail, in particular, has risen in prominence with regard to crude oil shipments. Over the years, numerous rail accidents, including spills and explosions, have occurred, resulting in environmental degradation and public insecurity. While we ultimately seek sustainable and clean energy supplies, efforts must be made to efficiently and safely manage current fossil fuel resources. Models such as NACOM will be instrumental in guiding policy and industry decisions over the coming decades, especially for infrastructure investment and fuel transfer diversification.
NACOM (North American crude oil model) is the first to account for multimodal flows (we consider pipeline, railway and waterways) throughout the entire continent. Furthermore, it also differentiates between light and heavy crude oil types. Finally, it features granularity at the US state level. All of these novel contributions make NACOM a truly innovative tool that will help address the transportation and environmental challenges associated with crude oil production in North America. In light of ongoing developments (pipeline policies, the lifting of the US crude oil export ban), scenario analyses in NACOM, along with potential couplings with other assessment models, will prove useful in the near future.
Currently, NACOM is calibrated against the 2012 baseline, and partially against 2015. The model runs in 3-year periods up to 2018. This will be extended to the longer term in future versions, and functionality for storage and emissions will be incorporated as well.
The output mapped below indicates the level of detail NACOM is capable. Here, we show baseline flows. At this initial stage, we have implemented three scenarios to find the best possible policies or combinations thereof to reduce the impact of crude-by-rail. Results from our analyses indicate that an integrated policy of rail caps, strategic pipeline investments and crude oil exports can mitigate rail movements of crude oil in the most sensitive regions.
- Oke, O., Huppmann, D., Marshall, M., Poulton, R., Siddiqui, S., “Multimodal transportation flows in energy networks with an application to crude oil markets,” In review, July 2016
- Oke, O., Huppmann, D., Marshall, M., Poulton, R., Siddiqui, S., “Mitigating environmental and public-safety risks of United States Crude-by-Rail Transport,” DIW Discussion Paper No. 1575, May 2016