Multimodal Transportation Flows in Energy Networks with an Application to Crude Oil Markets

Olufolajimi Oke, Daniel Huppmann, Max Marshall, Ricky Poulton, Sauleh Siddiqui 2018. Networks and Spatial Economics 19(2):521-555.

Abstract

Network models of energy markets have been beneficial for analyses and decision-making to tackle challenges related to the production, distribution and consumption of energy in its various forms. Despite the growing awareness of environmental and safety impacts of fuel transfer, such as emissions, spills and other harmful effects, existing energy models for various types of networks are yet to fully capture modal distinctions which are relevant to providing pathways to limiting these impacts. To address this deficit in detailed multimodal analyses, we have built on recent work to develop a partial-equilibrium model that incorporates the representation of multimodal fuel transfer within energy networks. In a novel application to the North American crude oil market, we also demonstrate that our model is a useful tool for exploring avenues for reducing the risks of light and heavy crude oil transportation across this region. The results we obtain indicate that a combined strategy of rail loading restrictions, pipeline deployments and a discontinuation of the oil export ban is most effective in reducing the transportation of crude oil by rail and thereby mitigating the associated risks.