The Transportation of Soviet Energy Resources

FINAL REPORT T O NATIONAL COUNCIL FOR SOVIET AND EAST EUROPEAN RESEARC H

TITLE : The Transportation of Soviet Energy Resources

AUTHOR : Matthew J . Sagers and Milford Green

CONTRACTOR : Weber State College

. Sagers and Milford B . Green PRINCIPAL INVESTIGATOR : Matthew J

COUNCIL CONTRACT NUMBER : 628-2

DATE : January 198 5

The work leading to this report was supported in whole or in part from funds provided by the National Council for Sovie t and East European Researoh .

EXECUTIV E SUMMARY

Soviet energy resources are the largest in the world, ye t energy problems have not bypassed the USSR . A major aspect o f current Soviet energy difficulties lies in the problem of transporting energy . This is because of the USSR's large size (one - sixth of the world's land surface) and the spatial disparit y between energy resources and demand . A key dichotomy exist s between the industrialized and densely settled " Europea n " portio n of the USSR and the thinly populated, but energy-rich, easter n portion (Siberia) . Most of the demand for energy originates i n the European portion, as it contains 5-80% of the Soviet popula-

tion, industry, and social infrastructure . In contrast, th e

Siberian portion contains only about 10% of the Soviet popula-

tion, but almost 90% of the country's energy resources .

This study attempts to analyze the transportation of Sovie t

energy resources . The purpose is to determine the general pat -

tern of movement for each of the main forme of energy (gas, crud e

petroleum, refined products, coal, and electricity), to identif y

constraints in the transportation system that inhibit efficien t

flows, and to evaluate the prospects for future developments ,

based upon this analysis of the system .

To accomplish this, each energy-transportation system i s

modeled as an abstract, capacitated network consisting of suppl y

nodes (production sites), demand nodes (consumption sites), an d

bounded arcs (transport linkages) . The essential characteristic s

of each are supply availabilities (production), demand level s

(consumption), and transport capacity, respectively . The optimal

i flows and associated costs for each network are determined b y applying the out-of-kilter algorithm, a network allocation model , to each abstracted system . This is done for each network usin g

1980, the most recent year for which reasonably complete statistics are available, as the base year .

Generally, the models provide justification for the post -

1980 developments in each system . Often these developments appear as solutions to the bottlenecks and transport problem s identified in the analysis . Thus overall, the current Sovie t energy program seems to be a rational response to existing problems . The major findings and speculations of the study ar e summarized below for each of the major forms of energy .

Natural gas has been given the leading role in the Sovie t energy program, with a 45% increase in output planned betwee n

1980 and 1985 . Its relatively recent development means the ga s system has changed considerably in recent years, so gas flows ar e modeled for 1970, 1975, and 1985 in addition to 1980 . The modeled flows closely replicate the actual flows, implying that th e

Soviet gas system is operating near optimum efficiency . Ou r models of the Soviet gas network also indicate that it become s successively more congested between 1970 and 1980, consonant wit h the maturation of the Soviet gas industry .

The major constraint in the pipeline system in 1980 was i n

the main lines from West Siberia, with other major bottleneck s along the Northern Lights route, at the main distribution point s of Ostrogozhsk and Ncvopskov (located south of Moscow), and i n the lines to the Transcaucasus . Subsequent pipeline developments in the network have alleviated these constraints, indicat -

ing that their construction was warranted .

A scenario for 1985, incorporating five major new lines ,

while increasing supply and demand at several key nodes, shows a n

improvement in the overall efficiency of the distribution net -

work, with the most serious constraints in the system bein g

alleviated . This confirms the view that the major pipelin e

construction program of the 11th Five-Year Plan was necessary .

Also the rather significant increase in gas exports contemplate d

between 1980 and 1985, including those to Western Europe, doe s

lot particularly tax the gas system with the additional line s

installed .

In the transportation of crude petroleum, the hypothetica l

flow patterns generated by the model in 1980 generally agree wit h

what little is known about actual flows, implying that the petro-

leum network also is operating efficiently . The majo r

constraints in the system in 1980 were in the European USSR ,

particularly in the older oil-producing regions in the Caucasus ,

rather than in the east at the origin of most of the USSR' s

petroleum . This problem has been alleviated to a considerabl e

extent by the construction of additional pipelines in the regio n

since 1980, so again the model correctly anticipates subsequen t

developments . In particular, the new Surgut-Novopolotsk pipelin e

greatly increases the efficiency of petroleum transmission . Th e

model shows the pipelines from West Siberia to the European USS R

to be operating close to capacity in 1980 . This demonstrates why

a new pipeline from West Siberia to the European USSR (betwee n

Kholmogory and Klin) is being constructed, despite the relativel y

iii little growth in petroleum production anticipated for Wes t

Siberia in the 11th Five—Year Plan .

in contrast, the movement of refined products is relativel y inefficient . About twice as many ton—kilometers actually ar e generated in distributing refined products in the USSR as ar e generated in the optimal flow model, This discrepancy is primarily due to the mismatch which exists among the variou s products between local consumption needs and refinery output mix , giving rise to a variety of cross--hauls between regions . This implies that Soviet transportation planning is adequate for homogeneous commodities in unique transportation systems (e .g ., gas , crude petroleum, electricity), as their distribution is relatively efficient, but apparently does not perform very well with th e complexity of heterogeneous products on common carriers .

A second simulation of refined product flows, incorporatin g the refinery expansion planned for the 11th Five—Year Plan , indicates that the locations chosen are generally justified .

Beyond this, the model indicates that the most likely areas fo r future refinery construction are the western Ukraine and the Fa r

East .

The simulation of Soviet coal flows explains and justifie s post—1980 plans for the sector, mainly in the develo p ment of a coal—by—wire approach for the lower quality coal of some easter n coal basins . This is because the model generates a massiv e movement of coal from the east at volumes that must be strainin g railroad facilities to the limit . The model also indicates tha t further expansion of production at Ekibastuz appears warranted .

However, expansion is not possible without more transport capacity . This dilemma appears to be resolved in the Soviet plans t o expand production at Ekibastuz, using the fuel to power mine — mouth generating stations, and transmitting the energy to th e

Urals and central Russia with extra—high—voltage electrica l

lines . An alternative solution to the transport problem tha t

also is supported by the results of the model is the conversio n

of the Central Siberian rail line into a specialized coal carrie r

to transport the higher quality Kuznets coal to the Europea n

USSR .

Our model of the Soviet electrical system indicates that i t

is operating under far more strain than it was in 1975 . A highe r

percentage of arcs are capacitated, and the problem proves to b e

infeasible without adjusting for greater dispersion of consump-

tion and including some planned extra—high—voltage (EHV) lines a s

if they were operational . The main problem in the Soviet elec-

trical network is the lack of transmission capacity, particularl y

in the Urals region . As a result, the model demonstrates th e

definite need for the planned EHV network of 1150 KVA lines i n

the Siberia—Kazakhstan—Urals region . These arcs are very heavil y

utilized in the model . In contrast, a simulation incorporatin g

the planned 1500 KVA (DC) line from Ekibastuz to central Russi a

indicates that the project does not appear justified because o f

very limited utilization and perverse flow patterns on some o f

the added arcs .

For further information see the following :

Matthew J . Sagers and Milford B . Green, "Coal Movements in th e USSR," Soviet Geography : Review and Translation, Vol . 25 no . 1 0 (December, 1984) .

Matthew J . Sagers and Milford B . Green, 'Modeling the Transporta- tion of Soviet Natural Gas," Proceedings, Conference on Modelin g and Simulation, (Pittsburgh, Pa ., 1984) .

Matthew J . Sagers and Milford B . Green, "Transport Constraints i n Soviet Petroleum," Energy Policy . (tentatively accepted fo r September, 1985) .

Milford B . Green and Matthew J . Sagers, "Changes in Sovie t Natural Gas Flows," The Professional Geographer, (forthcoming , 1985) .

Matthew J . Sagers, Refinery Throughput in the USSR, CIR Staf f Paper No . 2 , Bureau of the Census, Washington, D .C . ; May, 1984 .

Matthew J . Sagers and Milford B . Green, "Modeling the Transporta- tion of Soviet Natural Gas ;" paper presented et the Fifteent h Annual Pittsburgh Conference on, Modeling and Simulation, Pitts — burgh, Pa ., 1984 .

Matthew J . Sagers and Milford B . Green, "Transportation of Sovie t Natural Gas ;" paper presented at the meetings of the Associatio n of American Geographers, Washington, D .C ., 1984 .

Matthew J . Sagers end Milford B . Green, "Transportation of Sovie t Petroleum from Siberia ;" paper presented at the Midwest Slavi c Association Conference, Columbus, Ohio, 1984 . .

Matthew J . Sagers and Milford B . Green, "Coal Movements in th e USSR ;" paper presented at the meetings of the Southern Regiona l Science Association, Washington, D .C ., 1985 .

TABLE OF CONTENT S

I . INTRODUCTION 1

A. Background for the Study 1 B. Nature of the Investigation 5

Section I : References 8

II . CHANGING PATTERNS IN SOVIET NATURAL GAS FLOWS 1 1

A. Introduction 1 1 B. Model Results 1 8 C. Conclusions 2 5

Section II : References 3 3

III . TRANSPORT CONSTRAINTS IN SOVIET PETROLEUM 3 6

A. Introduction 3 6 B. Model Results 4 3 C. Conclusions 4 9

Section III . References 5 5

IV . THE DISTRIBUTION OF REFINED PETROLEUM PRODUCTS 5 7

A. Introduction 5 7 B. Model Results 6 6 C. Conclusions 7 5

Section IV . References 8 2

vii

CONTENTS--Continue d

V . COAL MOVEMENTS IN THE USSR 8 6

A. Introduction 8 6 B. Model Results 10 2 C. Conclusions 10 9

Section V . References 120

VI . TRANSMISSION CONSTRAINTS IN SOVIET ELECTRICITY 12 3

A. Introduction 12 3 B. Model Results 13 2 C. Conclusions 13 8

Section VI . References 14 6

VII . SUMMARY 14 8

FIGURE S

Figure 1: Gas Flows in 1970 2 6 2: Gas Flows in 1975 2 7 3: Gas Flows in 1980 2 8 4: Gas Flows in 1985 2 9 5: The Soviet Petroleum Network 5 1

6: Petroleum Flows in 1980 5 2 7: Refined Product Flows in 1980 7 7 8: Modeled Coal Flows in 1980 11 2

9: Coal Flows at 70 Percent of Demand 0 11 3 10: Electricity Transmissions in 1980 140 11: Electrical Transmissions with Planned 1500 KVA Line 14 1

viii

CONTENTS—Continue d

TABLE S

Table 1: Budget for Pipeline Gas in the USSR 3 0 2: Regional Gas Consumption by Electrical Stations 3 1 3: Gas Deliveries to Industrial, Municipal and Othe r Users 3 2 4: Petroleum Supply Nodes 5 3 5 . Domestic Petroleum Demand Nodes 5 4 6. Primary Transportation of Petroleum Products in 1981 7 8

7. Apparent Consumption of Refined Products in 1980 7 8 8. Consumption of Refined Products 8 0 9. Transport Opportunity Costs for Soviet Refinerie s in 1980 8 1 10. Coal Supply Nodes in 1980 11 4 11. Coal Consumption by Central Electrical Powe r Stations 11 6 12. Estimated Coal Deliveries in 1980 11 7

13. All Coal Deliveries 11 8 14. Approximate Structure of East—West Coal Flows i n 1980 11 9 15. Characteristics of the Soviet Grid Systems in 1980 14 2 lb . Republic Electricity Consumption in 1980 14 3 17. Power Transmissions Over 1500 MW per Hour 14 4 18. Power Transmissions Among the Grid Systems 14 5

I . INTRODUCTIO N

A . Background for the Stud y

Soviet energy resources are the largest in the world, bu t energy problems have not bypassed the USSR . The Soviet Union ha s been experiencing various energy difficulties, including escala- ting domestic demand, rising production costs, long—term expor t commitments to Eastern Europe, opportunities for export to th e

West, and a deteriorating reserve position for petroleum [OTA ,

1981 ; Dienes and Shabad, 1979 ; Stern, 1980] . A key concern i n these difficulties is the ability of the USSR to provid e sufficient energy for domestic and export demand . Given th e

USSR's vast resource base, any failure to produce (and deliver ) the desired quantities of energy cannot be attributed t o inadequate resources [Stern, 1980, p . 4 ; OTA, 1981] . Instead , other factors, particularly geographical aspects, become funda- mental .

The Soviet energy economy operates in a geographic space whic h comprises almost one—sixth of the earth ' s land surface (22,40 2 square kilometers of territory), and also includes the Easter n

1 European countries of CMEA (Council for Mutual Economi c

Assistance) . The large areal extent of this system makes spatia l aspects such as circulation and movement of considerabl e

importance . The spatial dimension is highlighted by the ke y dichotomy existing between the more industrialized and densel y settled "European" portion of the USSR and the thinly populated , but energy—rich, eastern portion (Siberia) . Most energy deman d originates in the European portion, as it contains about 75—80% o f the Soviet population, industry, and social infrastructure [Mints ,

1976 ; Rumer and Sternheimer, 1982] . In contrast, the Siberia n portion contains only about 10% of the Soviet population, bu t almost 90% of the country's energy resources [Mints, 1976 ; Diene s and Shabad, 1979] . These two macro—regions are separated b y thousands of kilometers .

Therefore the growing energy demand of the European USSR, a s well as exports to Eastern Europe and the West, will have to b e met with net energy transfers from Siberia . This poses a n enormous challenge for the various transportation system s involved, as they must bear the burden for resolving the USSR ' s spatial imbalance in energy supply . Styrikovich and Chernyayski y

[1979, p . 11] predict that by the end of the century, the Europea n

USSR's share of total Soviet energy demand will still be 65-70% , requiring a flow of energy from the eastern portion 2 .5 times tha t of 1975, which would amount to about 900 million tons of standar d fuel . Campbell [1983, p . 209] suggests a more reasonable estimat e

2 for the year 2000 is a flow of 1,117 million tons of standar d fuel, or about 38% of a likely estimate of total production fo r that year [p . 206] . In contrast, about 360 million tons o f standard fuel were involved in the East—West flow in 197 5

[Campbell, 1983, p . 209], or 23% of national productio n

[Narkhoz SSSR 1982, p . 143] .

The econom y ' s shift to the less accessible Siberian resource s has been one of the major factors responsible for risin g production costs and some of the other problems being experience d by the Soviet energy industries . This shift has made the proble m of transporting energy a matter of primary importance, as in som e cases (e .g ., natural gas and coal), development and productio n have been constrained by the availability of transport .

The availability of energy in the USSR, and transport's rol e in assuring this, are important . The Soviet economy, like thos e of the other centrally planned economies in CMEA, has a relativel y high energy intensiveness, showing a high correlation betwee n growth in energy inputs and the annual rate of economic growth , with no evidence of any recent decline [OTA, 1981 ; Levcik, 1981 ;

Dienes, 1983] . This reflects the traditional Soviet strategy o f

" input infusion . " Growth in output has been obtained throug h increased quantities of inputs (particularly labor and ra w materials) [Kirichenko, 1981 ; Pyzhkov, 1982 ; Greenslade, 1976] .

This phase of "extensive" industrialization is now supposedl y giving way to a new strategy of "intensiv e " development consonan t

3 with the period of developed socialism [Mints, 1976 ; Alisov ,

1976] . This change is largely due to growing relative scarcities of these inputs as Soviet labor reserves have dwindled [Feshbac h and Rapawy, 1976] and the stocks of accessible, high quality ra w materials have been exploited . These changes have meant mor e stress upon improvements in factor productivity and more efficien t use of resources as growth stimulants . This has require d increased imports of Western technology to help increas e productivity in the Soviet economy, and thus concomitantly , increased exports of natural resources (particularly energy) t o pay for the technology [Dohan, 1979] .

Therefore there are a variety of consequences if enough energ y to fulfill Soviet domestic needs as well as export requirements t o both the Eastern European CMEA countries and the West cannot b e delivered . These include an adverse impact upon the aggregat e rate of growth of the USSR's economy, both from a shortage o f energy inputs and from needed Wesern technology, a shortage o f hard currency to purchase Western technology and grain, th e possibility of greater social unrest in Eastern Europe and altere d economic and political relations within the Soviet bloc if th e long—standing Soviet commitment to fulfill the energy requirement s

(particularly in oil and gas) of Eastern Europe cannot be met .

4 B . Nature of the Investigatio n

The purpose of this report is to analyze a specific aspect o f the spatial dimension of the Soviet energy system, that o f efficiently transporting energy in its major forms (oil, coal , natural gas, and electricity) from sites of production to those o f consumption . The report will specifically focus upon the genera l pattern of flow within each energy-transportation system and upo n identifying major impediments to efficient flows and othe r transport problems .

This is accomplished by modeling each energy-transportatio n system as it existed in 1980 as an abstract capacitated network .

In each case, this network consists of supply nodes (productio n sites), demand nodes (consumption sites), and bounded arc s

(transport linkages) . The essential characteristics of each o f these elements are supply availabilities (production), deman d levels (consumption), and transport capacity, respectively . Th e optimal flows and associated costs for each network are determine d by applying a network allocation model, the out-of-kilte r algorithm, to each abstracted system . This pattern of optima l flows is compared with what little is known of actual flows . Fro m this, general observations on the relative efficiency of th e system can be made . This also provides some insight on the wisdo m of certain planned or current projects or developments, as th e

5 analysis is able to identify the need for some on the dubiousnes s of others .

This network model determines the most efficient allocatio n from sources of supply to points of demand (i .e ., that entailin g the least amount of transport cost) for each system as a whole .

This method has been used satisfactorily in many applie d distributional problems [Gauthier, 1968 ; Osleeb and Sheskin, 1977 ;

Sagers and Green, 1982] . The mathematical formulation an d solution methods for the algorithm are found in Minieka [1978] .

Application of the out-of—kilter algorithm (OKA) provides a system—wide minimization of total delivered costs while the flow s are bounded by the physical constraints of the system . It offer s the advantages of speed, cost, and flexibility . The OKA assume s that demand is inelastic and that surplus and deficit areas can b e expressed as points in space . If the deficit areas cannot b e served because of an inadequate surplus or the set of constraints , the problem is rendered infeasible . The causes of infeasibilit y are viewed as obstacles to efficient distribution in th e particular system being modeled, so the identification of thes e obstacles becomes an integral part of the analysis of the system .

The OKA also assumes that a homogeneous commodity is bein g distributed . While this is certainly true of electricity an d network gas, this becomes increasingly problematic with crud e petroleum, coal, and refined products .

6 Each of the following sections of this report discusses one o f the forms of energy . The allocation of natural gas is presente d in Section II, while that for crude petroleum is given in Sectio n

III . The distribution of refined petroleum products is th e subject of Section IV . Coal flows are discussed in Section V an d electricity in Section VI . Section VII represents a summary o f the major findings for each system and an evaluation of thei r relative efficiencies and prospects .

SECTION I : REFERENCE S

Alisov, 1976 : N . V . Alisov . " Spatial Aspects of the New Sovie t Strategy of Intensification of Industrial Production, " Soviet Geography : Review and Translation, Vol . 20, no . 1 (January 1979), pp . 1-6 .

Campbell, 1983 : Robert W . Campbell . " Energy," in Abram Bergso n and Herbert S . Levine (eds .) . The Soviet Economy : Towar d the Year 2000 (London : Allen and Unwin, 1983), pp . 191-217 .

Dienes, 1983 : Leslie Dienes . "Soviet Energy Policy and th e Fossil Fuels," in Robert G . Jensen et al . (eds .) . Sovie t Natural Resources in the World Economy (Chicago : Universit y of Chicago Press, 1983), pp . 275-295 .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . Th e Soviet Energy System : Resource Use and Policie s (Washingtion, D .C . : Winston and Sons, 1979) .

Dohan, 1979 : Michael R . Dohan . " Export Specialization and Impor t Dependence in the Soviet Economy, 1970-77," in U .S . Congress, Joint Economic Committee . Soviet Economy in a Time of Change, Vol . 2 (Washington, D .C . : U .S . Governmen t Printing Office, 1979), pp . 342-395 .

Feshbach and Rapawy, 1976 : Murray Feshbach and Stephen Rapawy . "Soviet Population and Manpower Trends and Policies," i n U .S . Congress, Joint Economic Committee . Soviet Econom y in a New Perspective (Washington, D .C . : U .S . Governmen t Printing Office, 1976), pp . 113-154 .

Gauthier, 1968 : Howard L . Gauthier . "Least Cost Flows in a Capacitated Network," in Frank Horton (ed .) . Studies o f Urban Transportation and Network Analysis, Northwester n University Studies in Geography, No . 16 (Evanston, Ill .: Northwestern University, 1968), pp . 107-127 .

Greenslade, 1976 : Rush V . Greenslade . "The Real Gross Nationa l Product of the USSR, 1950-1975," in U .S . Congress, Join t Economic Committee . Soviet Economy in a New Perspectiv e (Washington, D .C . : U .S . Government Printing Office, 1976) , pp . 270-300

Kirichenko, 1981 : V . N . Kirichenko . "Odinnatstataya pyatiletka : strukturnyye sdvigi v ekonomike," Izvestiya Akademii nau k SSSR : Seriya ekonomicheskaya, No . 2 (1981), pp . 5—6, 13 .

Levcik, 1981 : Friedrich Levcik . "Czechoslovakia : Economi c Performance in the Post—Reform Period and Prospects fo r the 1980's," in U .S . Congress, Joint Economic Committee . East European Economic Assessment : Part I Country Studie s 1980 (Washington, D .C . : U .S . Government Printing Office , 1981), pp . 377-424 .

Minieka, 1978 : Edward Minieka . Optimization Algorithms fo r Networks and Graphs (New York : Marcel Dekker, 1978) .

Mints, 1976 : A . A . Mints . " A Predictive Hypothesis of Economi c Development in the European Part of the USSR," Sovie t Geography : Review and Translation, Vol . 17, no . 1 (Januar y 1976), pp . 1-28 .

Narkhoz SSSR 1982 : TsSU (Tsentral ' noye statisticheskoy e upravleniye pri Sovete Ministrov SSSR) . Narodnoy e khozyaystvo SSSR v 1982 godu, statisticheski y yezhegodnik (Moscow : Finansy i statistika, 1983) .

Osleeb and Sheskin, 1977 : Jeffrey P . Osleeb and Ira M . Sheskin . "Natural Gas : A Geographical Perspective, " Geographica l Review, Vol . 67, no . 1 (January 1977), pp . 71-85 .

OTA, 1981 : U .S . Congress, Office of Technology Assessment . Technology and Soviet Energy Availability (Washington , D .C . : Office of Technology Assessment, 1981) .

Pyzhkov, 1982 : N . Pyshkov . " Nekotoryye voprosy planovog o rukovodstva ekonomikoy , " Planovoye khozyaystvo, No . 8 (August 1982), pp . 3—4 .

Rumer and Sternheimer, 1982 : Boris Rumer and Stephen Sternheimer . "The Soviet Economy : Going to Siberia?," Harvard Busines s Review, No . 82111 (January—February 1982), pp . 1—10 .

Sagers and Green, 1982 : Matthew J . Sagers and Milford B . Green . "Spatial Efficiency in Soviet Electrical Transmission, " Geographical Review, Vol . 72, no . 3 (July 1982), pp . 291-303 .

Stern, 1980 : Jonathan P . Stern . Soviet Natural Gas Developmen t to 1990 : The Implications for the CMEA and the Wes t (Lexington, Mass . : Lexington Books, 1980) .

Styrikovich and Chernyayskiy, 1979 : M . A . Styrikovich and S . Ya . Chernyavskiy . "Puti razvitiya i rol' yadernoy energetik i v perspektivnom energobalanse mira i ego osnovnyk h regionov ." Joint U .S .-Soviet Seminar under Energy Agreement , 1979 .

1 0

II . CHANGING PATTERNS IN SOVIET NATURAL GAS FLOW S

A . Introductio n

Due to the various energy difficulties experienced by the USS R

(and consequently CMEA) in the late 1970's, the Soviet leadershi p

formulated a development program for the 11th Five—Year Pla n

(1981—1985) in which energy became the country's top industria l

priority, with natural gas in the leading role . The pla n

ambitiously calls for increasing the output of natural gas fro m

435 billion cubic meters (BCM) in 1980 to 630 BCM in 1985 . Thi s

will probably represent nearly the entire increment to overal l

energy supplies for the period [Hewett, 1982, p . 391] .

The catalyst for this program was primarily the deterioratin g

situation for petroleum, the USSR's most important energy source .

In 1980, petroleum supplied 45% of Soviet fossil fuel productio n

and about 38% of consumption, while gas contributed about 27% an d coal about 25% [Dienes, 1983, pp . 285—286 ; Narkhoz SSSR 1980, p .

156] . Despite its prominant role, Soviet petroleum prospects hav e become somewhat uncertain because of a deterioration in reserv e position [Stern, 1981 ; Meyerhoff, 1983] . Growth rates in crud e petroleum production have slowed drastically and production ma y have peaked in 1983, as annual increments have falle n

1 1

precipitously since 1975 [Dienes, 1983, p . 206 ; "News Notes," SG -

April 1984, pp . 264-265] . Initially, the Soviets planned t o

offset this by shifting to coal but problems in the coal industr y

led to a decline in production in the late 1970's, forcing a

change in strategy to gas [Gustafson, 1982] .

Unlike petroleum, the development of gas is not hampered b y

lack of reserves, since the USSR possesses over 40% of the world' s

proven reserves of natural gas [Stern, 1983, p . 361] . Instead ,

the problem associated with natural gas is almost entirely one o f

geography . Over 75% of all gas reserves are located in Siberia ,

mostly in the northern part of Tyumen' Oblast in a few supergian t

fields [ " News Notes," SG-November 1983, pp . 363-384] . This place s

most of the USSR ' s gas potential roughly 3000 kilometers from th e

main industrial centers in the European USSR and about 450 0

kilometers from the East European border for export . Therefor e

the feasibility of the gas plans would appear to rest largely upo n

the Soviet's ability to install the necessary pipeline capacity t o

transport the gas to market .

Certain aspects of this transport problem are examined here b y

modeling the Soviet gas pipeline system as a capacitated networ k

and then analyzing the spatial dimensions of gas flows . This i s

done for 1970, 1975, 1980, and 1985 using the out-of-kilte r

algorithm (OKA) . The OKA is a method for determining the mos t

efficient allocation of gas from the fields to consuming areas a t

1 2 minimum transmission costs, providing a set of optimal flows an d associated costs for the arcs comprising the network .

All gas flows in the system are considered on an annual basis , although flows are evidently not constant during the course of th e year . There are sizable seasonal fluctuations in demand, and th e pipelines largely are geared to peak winter demand because o f insufficient underground storage capacity . The amount put int o storage in 1980 was only 25 BCM, or only about 7% of annua l consumption . In 1970 and 1975, the amount was even less, 5 .4 an d

14 .2 BCM, respectively (Table 1) . This places considerable stres s upon the distribution system in winter . All gas demand cannot b e met during the winter, so most gas—fired electrical stations ar e forced to use alternate fuels, particularly mazut (fuel oil )

[Nekrasov and Troitskiy, 1981 ; Grigor'yev and Zorin, 1980] , thereby undermining the policy of shifting consumption fro m petroleum to gas . Unfortunately, the two different seasonal flo w regimes which evidently characterize the system cannot be modele d because of insufficient data .

In order to analyze the spatial dimensions of Soviet ga s flows, the gas pipeline system first must be generalized into a n abstract network of supply nodes, demand nodes, and bounded arcs .

Supply nodes in the network are the major Soviet gas fields .

Regional gas production data are available, in some cases to th e field level [ " News Notes, " SG—April 1982, pp . 283—287] . Fo r others, estimates from regional data must be used . A total of 4 3

1 3

supply nodes are included in the network in 1980, with fewe r

fields in the earlier years . The - USSR also imports some gas, fro m

Iran and Afghanistan [Stern, 1983, p . 373] . The supply nodes fo r

these sources are located at Kelif, where the pipeline crosse s

from Afghanistan into Uzbekistan, and at Astara, where th e

pipeline from Iran enters Azerbaijan (Figure 1) .

The other two types of demand nodes are for domesti c

consumption and consist of electrical stations and major cities .

In this investigation, domestic consumption is not considered t o

include the amount used internally by the gas industry itsel f

(mainly to power compressor stations) . This amount (31 .2 BCM i n

1980) is removed from the allocation (Table 1) .

Electrical power stations are included as separate deman d

nodes because they are major consumers of natural gas in the USSR .

In 1970 and 1975 they used 51 .1 and 68 .7 BCM, respectively, o r

about 26–27% of domestic gas consumption . In 1980, the Ministr y

of Electrical Power consumed 91 BCM in generating electricity, o r

roughly 27% of domestic consumption (Table 1) . Regional ga s

consumption data for electrical stations (Table 2) are allocate d

among the gas–fired electrical stations in each region accordin g

to installed capacity . Only major stations are considered in th e

analysis, which includes all those over 1000 MW and many smalle r

stations known to be at least 300 MW, for a total of 42 electrica l

stations .

1 4 Some regions contain only smaller TETs (heat and powe r

stations) in the major cities, so in a few cases (e .g ., Centra l

Chernozem region), the amount utilized by electrical stations i s

allocated among the major cities in each region according to siz e

(see below), thus only implicitly accounting for consumption b y

TETs . For other regions which contain many smaller TETs and onl y

a few major gas—fired stations (e .g ., Urals, Volga, Ukraine), onl y

half the regional consumption totals are allocated to the majo r

power stations, with the other half allocated by city size t o

account for consumption at the smaller TETs .

Other domestic gas users are considered to be located in majo r

cities . Principally these are industry (accounting for 56 .7% o f

domestic consumption in 1975 or 148 .4 BCM), and housing and th e

communal economy (accounting for 13 .6% of consumption) [Ryps ,

1978, p . 13] . Within industry, the largest consumer is ferrou s metallurgy, accounting for nearly one—quarter of industria l

consumption in 1975 (34 .4 BCM), with other significant amount s

being used in the chemicals, machine—building, and constructio n materials industries [Ryps, 1978, p . 13] .

Data on the regional distribution of gas consumption for thes e

users are given in Table 3 . The amount in each region i s allocated among the major cities in each according to population .

This approximately reflects the relative size of their industria l bases and communal economies [Huzinec, 1978] . " Major " cities ar e considered to include all those on the network over 300,000 b y

1 5 1980, as well as all oblast centers and some smaller citie s

located at key points in the gas network (e .g ., Kotlas, Yelets ,

Serov, and Serpukhov) . A total of 144 cities are included a s

demand nodes in 1980 . Fewer are included in the earlier year s

because of the smaller network . Moscow is the largest consumer ,

demanding 25 .0 BCM of gas in 1980 plus another 4 .7 BCM for it s

3500 MW TETs's . This represents nearly 12% of domesti c

consumption . Leningrad's demand in 1980 is about half this a t

12 .2 BCM . In contrast, a number of cities (e .g ., Kemerovo ,

Novosibirsk, Gulistan, Krasnovodsk, Kotlas) have consumptio n estimated at only 0 .1 BCM in 1980 .

The only exception to the method of allocating the regiona l total among the cities is the Ukraine . Consumption data fo r

Ukrainian cities in 1970 and 1975 are given in Kalchenko et al .

[1974) . However, these data must be adjusted by subtracting th e amount allocated to the major electrical stations (estimate d above) . Not surprisingly, these data show much higher consumption of gas in the large cities of the eastern Ukraine where ferrou s metallurgy predominates (e .g ., Donetsk, Voroshilovgrad), whe n compared with an allocation based upon just population size . Thi s probably means that consumption for other centers of ferrou s metallurgy, such as Magnitogorsk and Cherepovets, are under — estimated .

In addition to these supply and demand nodes, 41 intermediat e nodes are added to the network to allow for junctions or change s

1 6

in capacities at sites other than supply or demand nodes . Thes e

include such key junction points as Torzhok, Ostrogozhsk ,

Novopskov, Aleksandrov—Gay, Nadym, and Gryazovets .

Bounded arcs represent the pipelines . The capacity of eac h

arc is set by an upper bound determined by the reported operatin g

average by size of pipe [Dienes and Shabad, 1979, p . 83 ; CIA ,

1978, Appendix 1], ranging from 1 .5 BCM annually for a 530 mm pip e

to 25 .0 BCM for a 1420 mm pipe . However, several other factors ,

most importantly compressor capacity, affect actual carryin g

capacity . Thus not all pipelines, or evidently, even particula r

sections of the same line, operate at these levels . Delays i n

installing compressor capacity are know to plague the Soviet ga s

industry, resulting in many pipelines operating under desig n

capacity [Stern 1983, p . 369] . However, these factors could no t

be incorporated in the model because of insufficient data .

Distance is used as a surrogate for transportation cost in th e

network since transportation costs in the Soviet gas system ar e

largely determined by the distance gas has to be shipped, althoug h

other factors such as the size of pipe and the number of string s

also affect this [Tretyakova, 1984] . Distances in the model ar e

. calculated from the latitude and logitude of the terminal node s

for each arc . The length of an arc thus becomes the cost o f

utilizing it .

1 7 B . Model Result s

The modeled flows for 1970 are shown in Figure 1 . The model -

generated flows correspond quite closely to known actual flows fo r

1970 [Gankin et al ., 1972, p . 100] . The small size of the flow s

indicates a relatively underutilized energy source as well as a

somewhat skeletal distribution system . This corresponds with th e

noted immaturity of the industry as well as its relatively lat e

start [Dienes and Shabad, 1979 ; Stern, 1980] . For example, th e

main flow in the system, from the North Caucasus to Centra l

Russia, is only 21 .3 BCM (this is between Rostov an d

Voroshilovgrad), and exports to Eastern Europe were only 3 .3 BCM .

The model provides an opportunity cost for each of the arcs a s

part of an optimal solution . The opportunity costs allo w

identification of arcs that are fully utilized and thus serve a s

constraints on the distribution of gas . The solution for 1970 ha s

only a few significant constraining arcs . The scattering of th e

locations of the arcs indicates that no one region is underbuil t

and responsible for inefficiency in the gas distribution system .

The five arcs with the largest opportunity costs and therefor e

present the options for the greatest savings in transport cost s

are Petrovsk-Penza, Zainsk-Kazan', Maykop-Tikhoretsk, Bryansk -

Kaluga, and Yelets-Tula (Figure 1) . These constraints aris e mostly along the main route from the North Caucasus to Moscow , although two are connecting lines in the Volga region .

1 8 The 1975 pattern of flows is shown in Figure 2 . The flo w pattern becomes somewhat more complex, with a greater number o f utilized pipelines as well as larger flows . A significant ne w field at Medvezh'ye in Tyumen' Oblast is utilized . Substantiall y larger flows now take place from Central Asia to Central Russi a through Beineu, Makat, and Aleksandrov—Gay (Figure 2) . Thi s reflects the role of Central Asia as an intermediate producin g region after the early limited resources of the European USSR i n the North Caucasus and Ukraine had been developed but before th e vast potential of West Siberia could be fully exploited [Diene s and Shabad, 1979, p . 79] . Thus the region reached its nadir i n terms of importance in the mid—1970's .

The flow map corresponds quite closely with known flow an d supply patterns for 1975 [Furman, 1978, p . 39] . The hypothetica l flows also reflect the relative change in total cost (BCM — kilometers) for the Soviet system from 1970 to 1975 . Costs ros e in the modeled network from 146 .9 BCM—kilometers to 292 .6 BCM — kilometers) from 1970 to 1975, an increase of 50 .2% . In the sam e period actual costs rose by 48 .2%, from 166 .4 to 345 .6 BCM — kilometers [Stern, 1983, p . 391] .

The increasing strain being placed on the gas distributio n system is indicated by the number of arcs being utilized at o r above capacities indicated by Soviet sources . In 1970, 16 arcs i n

1 9 the model are capacitated, while in 1975 the number more tha n doubles to 37 . One set of arcs comprising the Northern Light s system (Figure 2), is utilized at a level considerably above th e

20 BCM of capacity originally assigned . The high opportunit y costs associated with these arcs indicate an upgrading of th e pipelines would increase efficiency . This result correctl y anticipates the actual upgrading of the Northern Lights system' s capacity to 55 BCM by 1980 [CIA, 1978, p . 59] .

The major modeled flows for 1980 are shown in Figure 3 . Thes e hypothetical flows generally correspond with the projected flo w patterns for 1980 [Furman, 1978, p . 40] . The hypothetical flow s also replicate the relative change in total BCM—kilometers in th e

Soviet system for this period . For example, costs rose in th e modeled network from 292 .6 BCM-kilometers in 1975 to 624 .2 in 198 0

(47%) . In actuality, costs rose by 47%, but from 345 .6 to 742 . 3

BCM—kilometers [Stern, 1983, p . 371] . Modeled costs are only 85 % of actual BCM—kilometers due to the abstractions used, such a s straight line distances and imperfections in the demand estimates .

However, the results from the model do imply that the Sovie t system is operating near optimum efficiency .

One interesting result is that the model generates almost n o flow through the Central Asia—Urals pipeline in 1980, as the lin e becomes superfluous with the advent of Siberian gas after 1975 .

This does occur in reality, as the empty pipeline is bein g

2 0 considered as a conduit for transferring water from West Siberi a to Central Asia [Kibalchich, 1983] .

The 1980 allocation shows an increase in the amount o f congestion in the system . Over 60 arcs are capacitated, an d several major problem areas are highlighted from adjustment s necessary to achieve a feasible solution . One is in the main lin e from West Siberia, with a severe lack of transmission capacity .

This arc, between Nadym and Igrim (Figure 3), connects the gian t

West Siberian fields with the Urals and Northern Light s transmission systems and is required to transmit 90 BCM, about 30 % more than its original assigned capacity . As in the 197 5 solution, the other arcs in the Northern Lights system tha t transverse the Komi ASSR to Torzhok (Figure 3) are also eithe r capacitated or required to operate in excess of assigne d capacities . This implies that this line requires furthe r upgrading for the efficient distribution of natural gas an d confirms the view that additional pipeline construction i s necessary for the success of the gas plans .

Another major bottleneck is in the main lines feeding gas fro m

Central Asia, West Siberia, and Orenburg into the majo r distribution points at Ostrogozhsk and Novopskov (Figure 3) . The y are forced to operate well over assigned capacities in order t o meet the large demand for eastern gas in the region caused by th e decline of production in the Ukraine and North Caucasus .

2 1 The third major area experiencing difficulties is th e

Transcaucasus . The problem here is due to supply disruption s following the revolution in Iran . To offset the anticipate d decline in local production, the USSR began to import gas fro m

Iran in 1970 to supply the three Caucasian republics . Import s reached 9 .6 BCM in 1975, but following the Iranian revolution , imports dropped to about 1 .0 BCM in 1980 before ceasing altogethe r

[Stern, 1983, p . 3733 . This causes a local gas shortage since th e lack of transmission capacity precluded bringing in alternat e supplies . The magnitude of this problem is illustrated by th e fact that the gas source at Astara has to be increased from 1 to 5

BCM to make the solution feasible . This can be taken as a measur e of the supply shortfall in the region .

These last two bottlenecks illustrate some of the problem s being experienced by the older gas—producing areas as thei r supplies are depleted, necessitating the re—orientation of ga s flows through existing lines .

The success at modeling Soviet gas distribution for 1970 ,

1975, and 1980 allows us to present an analysis of probable flo w patterns for 1985 . This is accomplished by adding several ne w lines to the system and increasing supply and demand at severa l key nodes .

The 11th Five—Year Plan (FYP) calls for the entire increase i n gas supplies to come from the supergiant field at Urengoy in Wes t

Siberia . To accomodate this increase, six large pipelines fro m

22 the field were slated for construction between 1981 and 1985 , following existing routes . So far, four of them have been more o r less completed, with the fifth scheduled to become operational b y

September, 1984 ["News Notes, " SG-April 1983, p . 310 ; Decembe r

1983, pp . 775-777 ; Stroitel'stvo truboprovodov, 1984, pp . 2-4] .

Although the installation of compressor capacity is lagging, it i s likely that at least these five lines will be operational by 1985 .

One pipeline follows the Northern Lights system through Ukht a to Moscow (and continues on through Torzhok and Minsk to th e export point at Uzhgorod), thus alleviating some of the congestio n on the Northern Lights system noted in the 1980 allocation (se e above) . It is interesting to note that it was the firs t constructed in the 11th FYP Plan, becoming operational in 1981 .

Two of the other new lines are intended to deliver gas to ke y junctions for further distribution . One pipeline runs fro m

Urengoy through Perm' to Petrovsk, while another follows this sam e route but continues on from Pertrovsk to Novopskov . The line t o

Petrovsk became operational in 1982, and the line to Novopskov, i n

1983 . These lines should alleviate the capacity limitation s indicated at Ostrogozhsk and Novopskov in the 1980 solution (se e above) . An extension of this second line was constructed in 198 3 and 1984 from Novopskov to Kazi-Magomed in Azerbaijan to offse t the loss of imports from Iran ["News Notes," SG-April 1984, p .

275] .

2 3 A fourth pipeline runs from Urengoy to Uzhgorod for export .

Pipelaying was completed on this controversial export line i n

1983, and all compressor capacity was due to be installed by mid —

1984 ["News Notes," SG—December 1983, pp . 775-777) . The fift h

pipeline, running from Urengoy through Perm' to the central are a

of the European USSR (Khar'kov), is slated for completion in 1984 .

Work continues on the sixth pipeline, also running from Urengoy t o

the central European USSR (Kiev), and it may be completed by 1985 .

Each of the five new pipelines is added to the existing (1980 )

network and assigned a capacity of 25 BCM, with demand increase d

at the terminii of each a like amount . Thus demand at Moscow ,

Petrovsk, and Khar'kov is increased by 25 BCM, while demand a t

Novopskov and Kazi—Magomed (the two terminii of the third line) i s

made 15 and 10 BCM, respectively . Exports through Uzhgorod ar e

set at 70 BCM, 30 BCM of which represents exports to Wester n

Europe . Therefore in the scenario, total Soviet exports are 8 2

BCM .

The addition of the five new lines in the model allows ga s

production at Urengoy to be increased by 140 BCM, so the scenari o

places useful Soviet gas production in 1985 at 575 BCM, with 19 0

BCM being produced at Urengoy . To this can be added the amoun t

consumed by the gas industry itself in 1980 (Table 1), as this wa s

removed from the analysis . This would make total production i n

1985 around 606 BCM, of which 221 BCM would be at Urengoy . Actua l production in 1983 was 536 BCM, and judging from mid—year results ,

2 4 it looks like production in 1984 will be around 585 BCM [Ekon . gazeta, May 1984, p . 4 ; Pravda, 22 July 1984, p . 1] . Therefor e this 1985 scenario appears fairly realistic .

C . Conclusion s

The bottlenecks identified in the analysis seem to correctl y anticipate subsequent developments . Flow patterns generated by the model replicate what little is known about actual flows .

Changes in relative costs are also closely duplicated althoug h actual totals varybecause of model assumptions .

Once the Soviet gas system is modeled in its basic dimensions , a scenario for 1985 is examined . The effect of an additional fiv e large pipelines from the West Siberian field at Urengoy i s determined . The addition of such pipelines increase efficienc y and indicate the most serious constraints in the system ar e alleviated .

Additional scenarios could be incorporated within the model t o examine various possibilities and options, such as the effect o f construction delays on certain lines or the impact of an alternat e route upon transport costs . In this way, the rationality o f

Soviet plans can be evaluated as well as the prospects fo r delivering adequate supplies of gas .

2 5

Figure 1 . Gas Flows in 1970

Figure 2 . Gas Flows in 1975

Figure 3 . Gas Flows in 1980

Figure 4 . Gas Flows in 1985

Table 1 .

BUDGET FOR PIPELINE GAS IN THE USS R (BCM )

Receipts 1970 1975 198 0

1. Gas production 199 .6 291 .0 435 . 2 2. Gas from storage 3 .6 8 .6 15 . 1 2 . Gas imports 3 .5 12 .4 3 . 5 4. Total 206 .7 312 .0 453 . 8

Expenditure s

5. Gas to storage 5 .4 14 .2 25 . 0 6. Addition to amount in pipe .1 .2 . 5 7. Internal use of gas industry 7 .2 16 .4 31 . 2 8. Exports 3 .3 19 .3 55 . 6 9. Total 16 .0 50 .1 112 . 3

Consumptio n

10. Domestic deliveries 190 .7 261 .9 341 .5. 11. Use by electrical stations 51 .1 68 .7 91 . 0 12 . Deliveries to other industria l and municipal consumers 139 .6 193 .2 250 . 5

Sources : Line 1 : Ryps [1978, pp . 12—13] for 1970, 1975 ; Narkhoz SSS R 1980, p . 157 for 1980 . Lines 2, 5 : Ryps [1978, pp . 12—13] for 1970, 1975 ; inflow fo r 1980 from Grigor'yev and Zorin [1980, p . 16] ; outflow estimated for 1980 from the 1975 relation ship between storage inflow and outflow . Line 3 : Ryps [1978, pp . 12—13] for 1970, 1975 ; Stern [1983 , p . 373] for 1980 . Line 4 : Sum of lines 1, 2, and 3 . Line 6 : Ryps [1978, pp . 12—13] for 1970, 1975 ; estimated fo r 1980 from length of gas pipeline [Stern, 1983, p . 371] and 1975 ratio of amount to length . Line 7 : Ryps [1978, pp . 12—13] for 1970, 1975, extrapolate d for 1980 from the linear trend between 1970 an d 1978 . Line 8 : Ryps [1978, pp . 12—13] for 1970, 1975 ; Stern [1983 , p . 373] for 1980 . Line 9 : Sum of lines 5, 6, 7, and 8 . Line 10 : Line 4 minus line 9 . Line 11 : Ryps [1978, pp . 12—13] for 1970, 1975 ; Nekrasov an d Troitskiy [1981, p . 224] for 1980 . Line 12 : Line 10 minus line 11 .

3 0

Table 2 .

REGIONAL GAS CONSUMPTION BY ELECTRICAL STATION S (BCM)

1970 1975 198 0

USSR 51 .1 68 .7 91 . 0

Northwest 1 .5 1 .3 1 .8 ** Central 8 .1 8 .3 11 . 9 Central Chernozem 1 .1 1 .0 1 .4* * Volga—Vyatka .3 .6 .9* * Volga 5 .9 13 .2 16 .1 * North Caucasus 4 .1 2 .8 3 . 8

Urals 7 .8 9 .9 15 .8 * West Siberia (a) 0 2 .3 4 . 0 East Siberia (a) 0 0 0 Far East (a) 0 0 0 Baltic .8 .8 1 . 3 Belorussia .9 .9 . 8

Ukraine 12 .1 9 .9 12 . 8 Moldavia 0 0 . 4 Transcaucasus 1 .1 6 .0 6 . 7 Central Asia 5 .2 9 .4 8 . 9 Kazakhstan (a) 2 .1 2 .3 2 . 3

* Only half of this amount is actually allocated to the powe r stations in the region to adjust for consumption by TET s (heat and power stations) .

** There are no major stations in the region (only TETs) so th e total is allocated among the demand nodes in the regio n according to city size .

Sources : Data for 1970 and 1975 for most regions are from Ryp s [1978, p . 38] . The amounts for regions marked (a) have bee n disaggregated from Ryps ' residual "other" regions categor y according to relative capacities of major gas—fired station s in the various regions . Total consumption in 1980 is fro m Nekrasov and Troitskiy [1981, p . 226] . Estimates for th e regions in 1980 are from data in Nekrasov and Troitski y [1981, p . 232] and Fedorov et al ., "Osnovnoyye printsip y gazosnabzheniye narodnogo khozyaystva, " Gazovay a promyshlennost', No . 12 (1981), p . 7 . Some regional estimate s are disaggregated from larger regional groupings according t o relative capacities of gas—fired station s

3 1

Table 3

GAS DELIVERIES TO INDUSTRIAL, MUNICIPAL AND OTHER USER S (Excluding Electrical Stations ) (BCM)

1970 1975 198 0

USSR 139 .6 193 .2 250 . 5

Northwest 7 .8 11 .4 18 . 4 Central 22 .0 26 .8 38 . 8 Central Chernozem 3 .5 5 .1 6 . 1 Volga—Vyatka 4 .4 4 .8 5 . 6

Volga 15 .6 18 .1 24 . 3 North Caucasus 10 .7 14 .2 16 . 4 Urals 17 .2 25 .7 30 . 8 West Siberia .4 .8 . 8

East Siberia .4 2 .6 3 . 8 Far East 1 .2 1 .3 1 . 4 Baltic 2 .0 3 .0 4 . 5 Belorussia 2 .0 2 .6 3 . 7

Ukraine 36 .7 47 .2 59 . 2 Donets-Dnieper 22 .5 28 .6 35 . 9 Southwest 12 .0 16 .3 20 . 6 South 2 .2 2 .3 2 . 7

Moldavia .2 .4 . 6 Transcaucasus 7 .4 10 .9 13 . 9 Central Asia 6 .6 12 .1 15 . 1 Kazakhstan 1 .5 6 .2 7 . 0

Sources : Data for 1970 and 1975 are from Ryps [1978, pp . 15, 38] . 1980 data are estimated from Fedorov et al . [1981, p . 7] an d the estimates in Tables 1 and 2 .

3 2

Section II : REFERENCE S

CIA, 1978 : Central Intelligence Agency . USSR : Developmen t of the Gas Industry, ER 78—10393 (July 1978) .

Dienes, 1983 : Leslie Dienes . "Soviet Energy Policy and th e Fossil Fuels," in Robert G . Jensen et al . (eds .) . Soviet Natural Resources in the World Economy (Chicago : University of Chicago Press, 1983) .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . The Soviet Energy System : Resource Use and Policie s (Washington, D .C . : Winston and Sons, 1979) .

Ekon . gazeta, 1984 : Ekonomicheskaya gazeta, No . 19 (Ma y 1984), p . 4 .

Fedorov et al ., 1981 : N . A . Fedorov et al . "Osnovnoyy e printsipy gazosnabzheniye narodnogo khozyaystva , " Gazovaya promyshlennost ' , No . 12 (1981), p . 7 .

Furman, 1978 : I . Ya . Furman . Ekonomika magistral'nog o transporta gaza (Moscow : Nedra, 1978) .

Gankin et al ., 1972 : M . Kh . Gankin et al . Perevozki gruzo v (tendensey razvitiya i puti ratsionalizatsiy) (Moscow : Transport, 1972) .

Grigor'yev and Zorin, 1980 : A . M . Grigor'yev and V . M . Zorin (eds .) . Teploenergetika i teplotekhnik a (Moscow : Energiya, 1980) .

Gustafson, 1982 : Thane Gustafson . "Soviet Energy Policy, " in U .S . Congress, Joint Economic Committee . Sovie t Economy in the 1980 ' s : Problems and Prospects, Part I (Washington, D .C . : U .S . Government Printing Office , 1982), pp . 431-456 .

3 3

Hewett, 1982 : Ed . A . Hewett . "Near-Term Prospects for th e Soviet Natural Gas Industry, and the Implications fo r East-West Trade, " in U .S . Congress, Joint Economi c Committee . Soviet Economy in the 1980's : Problems an d Prospects, Part I (Washington, D .C . : U .S . Governmen t Printing Office, 1982), pp . 391-413 .

Huzinec, 1978 : George Huzinec . " The Impact of Industria l Decision-Making upon the Soviet Urban Hierarchy, " Urban Studies, Vol . 15, no . 2 (June 1978), pp . 139-148 .

Kalchenko et al ., 1974 : V . N . Kalchenko et al . Ekonomik a gazovoy promyshlennost' (Kiev : Tekhnika, 1974) .

Kibalchich, 1983 : O. A. Kibalchich . "Comments," Sovie t Geography : Review and Translation, Vol . 24, no . 1 0 (December 1983), pp . 724-727 .

Meyerhoff, 1983 : Arthur A . Meyerhoff . " Soviet Petroleum : History, Technology, Geology, Reserves, Potential an d Policy, " in Robert G . Jensen et al . (eds .) . Sovie t Natural Resources in the World Economy (Chicago : University of Chicago Press, 1983), pp . 306-362 .

Narkhoz SSSR 1980 : TsSU (Tsentral ' noye statisticheskoy e upravleniye pri Sovete Ministrov SSSR) . Narodnoy e khozyaystvo SSSR v 1980 godu, statisticheskiy yezhegodni k (Moscow : Finansy i statistika, 1981) .

Nekrasov and Troitskiy, 1981 : A . M . Nekrasov and A . A . Troitskiy . Energetika SSSR v 1981-1985 godakh (Moscow : Energoizdat, 1981 .

"News Notes," SG- .. Theodore Shabad . "News Notes, " Soviet Geography : Review and Translation : Vol . 23, no . 4 (April 1982), pp . 283-287 . Vol . 24, no . 4 (April 1983), p . 318 . no . 9 (November 1983), pp . 363-384 . no . 10 (December 1983), pp . 775-777 . Vol . 25 no . 4 (April 1984), pp . 264-265, 272, 275 .

Pravda, 22 July 1984, p . 1

Ryps, 1978 : G . S . Ryps . Ekonomicheskiye problem y raspredeleniya gaza (Moscow : Nedra, 1978) .

Stern, 1980 : Jonathan P . Stern . Soviet Natural Ga s Development to 1990 : The Implications for the CME A and the West (Lexington, Mass . : Lexington, 1980) .

3 4

Stern, 1981 : Jonathan P . Stern . "Western Forecasts of Soviet an d East European Energy over the Next Two Decades (1980 - 2000)," in U .S . Congress, Joint Economic Committee . Energy in Soviet Policy (Washington, D .C . : U .S . Governmen t Printing Office, 1981), pp . -- -- .

Stern, 1983 : Jonathan P . Stern . "Soviet Natural Gas in th e World Economy," in Robert G . Jensen et al . (eds .) . Soviet Natural Resources in the World Economy (Chicago : University of Chicago Press, 1983), pp . 363-384 .

Stroitel ' stvo truboprovodov, No . 3 (March 1984), pp . 2-4 .

Tretyakova, 1984 : Albina Tretyakova . Expenditures on Fuel s in the USSR to 1990 . Foreign Economic Reports, No . -- . (Washington, D .C . : U .S . Bureau of the Censu s [forthcoming]) .

3 5

III . TRANSPORT CONSTRAINTS IN SOVIET PETROLEU M

A . Introductio n

Although the USSR has been the world's leading producer of , crude petroleum since the mid—1970's, the Soviet oil situatio n has become somewhat uncertain in recent years because of a deterioration in reserve position . As a result, growth rates i n crude production have slowed drastically and production may hav e peaked in 1983, as annual increments have fallen precipitousl y since 1975 [Dienes, 1983, p . 206 ; "News Notes," SG—April 1984, pp .

264—265 ; Pravda, 22 July 1984, p . 1] .

While the most serious long term problem in Soviet oi l prospects probably concerns deteriorating reserves, the situatio n is exacerbated by transportation problems because of the changin g geography of petroleum production . Before World War II, Sovie t oil production was concentrated in the Caucasus, at Baku an d

Groznyy . In the mid—1950's the center of production shifted t o the Volga—Urals region, and output grew rapidly so that by th e early 1960's the USSR was the world's second largest produce r after the United States . Then in the 1970's, the Volga—Ural s fields were surpassed in production by those of West Siberia . B y

1980 over half of Soviet crude was coming from West Siberia an d

3 6 now the proportion is around 60 percent ["News Notes," SG—Apri l

1982, p . 278 ; and April 1984, p . 266] .

In this section, certain aspects of the problem o f transporting crude petroleum in the USSR are examined . This is a very difficult area to evaluate because of limited information o n oil production, refinery capacities and oil pipelines . Howeve r with fragmented data, evaluation of the oil transport system i s undertaken, identifying constraints and future problem areas .

This is done by modeling the Soviet petroleum distribution syste m as it existed in 1980 (Figure 5) as a capacitated network an d utilizing the out—of—kilter algorithm (OKA), to generate optima l hypothetical flows for the system, indicating general patterns o f movement . Relatively little is known about the overall magnitud e or direction of actual petroleum flows in the Soviet Union .

The main West Siberian fields, which now account for the bul k of Soviet production, are about 1500 miles farther east than thos e of the Volga—Urals and that much farther from existing refinerie s and the main consuming centers in the European USSR . To move oi l from the rapidly expanding new fields in West Siberia to the mai n refining centers in the European USSR required the construction o f a massive new pipeline network . Initially crude was moved b y tanker barge from the fields near Surgut and Nizhnevartovsk dow n the Ob' and then up the Irtysh River to Omsk for refining . Thi s was a stopgap measure and as the volume of production grew, a 102 0 mm (40 inch) pipeline was constructed in 1967 to Omsk . By 1970 ,

3 7

West Siberian production had grown to the point when it exceede d

the capacity of the Siberian refineries at Omsk and Angarsk, s o

the flow in the existing trans—Siberian pipelines from Ufa wa s

reversed, supplying Siberian crude to the Volga refineries fo r

processing [Dienes and Shabad, 1979, p . 57] .

The rapid growth of West Siberian production associated wit h

the development of the giant Samotlor field in the early 1970' s

required further expansion of the pipeline network . In 1972 a

1220mm (48 inch) line from Samotlor east to Anzhero—Sudzhensk wa s

completed (Figure 5), and a year later it was extended t o

Krasnoyarsk . Apparently by 1980 the line had reached the Angars k

refinery near Irkutsk [Dienes and Shabad, 1979, p . 67 ; Shcherbin a

et al ., 1981] .

Two other 1220 mm (48 inch) lines were completed in the 1970' s

to the western USSR . The first, the Samotlor—Almet'yevsk line ,

was finished in 1973, and the second, between Nizhnevartovsk an d

Kuybyshev, in 1976 [Dienes and Shabad, 1979, p . 66] . Both follo w

a southerly route through Tobo l ' sk, Tyumen' and Kurgan (Figure 5) .

These new lines increased transmission capacity between Wes t

Siberia and the European USSR to about 175 million tons per yea r

(total Soviet production in 1975 was 491 million tons) . I n

1977 an 820 mm (32 inch) line was constructed south from Omsk t o

the new refinery at Pavlodar in Kazakhstan and by 1983 it had bee n

extended to Chimkent, the site of another new refinery still unde r

construction ["News Notes," SG—April 1983, p . 216] . Plans cal l

3 8 for the eventual extension of this pipeline to another ne w

refinery under construction at Neftezavodsk in Turkmenia, with a

spur to supply the existing refineries at Fergana and Khamza i n

Uzbekistan .

In the late 1970 ' s, construction began on a 1220 mm pipelin e

from Surgut to Novopolotsk in Belorussia, following a mor e

northerly route to supply refineries at Perm', Go r ' kiy, Yaroslav l '

and Novopolotsk (Figure 5) . The line had been extended as far a s

Yaroslavl ' by 1980 and was completed in 1981, adding another 7 5

million tons to westward transmission capacity ["News Notes, " SG —

April 1982, p . 281] .

Other adjustments in the pipeline network have been require d

as petroleum production has increasingly shifted to West Siberia .

Additional trunk lines were constructed in the Ukraine, Nort h

Caucasus and Azerbaijan to handle the new pattern of flows ["New s

Notes," SG—October 1983, pp . 625—627 ; April 1978, p . 275 ; Februar y

1975, p . 122] .

To analyze the spatial dimension of petroleum flows, the out-

of—kilter algorithm (OKA) is applied to an abstract network of th e

oil distribution system . This network consists of supply node s

(oil fields), demand nodes (oil refineries and export points), an d bounded arcs (pipelines and other transport links) . The OK A

allocates flows between nodes in a manner that minimizes the tota l

transport costs for the entire system . This is accomplished b y utilizing transmission arcs with the lowest costs (smalles t

3 9 distances in this model) subject to constraints on arc capacity ,

supply availability, and level of demand .

Identifying supply nodes and supply availability is straight -

forward, as they comprise the major Soviet oil fields and/or oil -

producing regions . A total of 31 supply nodes are utilized ,

producing 603 million tons of petroleum (Table 4) .

There are two types of demand nodes in the network, domesti c

and foreign . Virtually all crude is refined before going to fina l

consumers as various refined products such as mazut, diesel fue l

or gasoline, so the domestic demand nodes are the petroleu m

refineries (or refinery complexes if more than one plant i s

located in a city) . In 1980, there were 42 of these refiner y

locations . Primary refinery throughput for each has bee n estimated by Sagers [1984] providing domestic demand estimates fo r crude petroleum (Table 5) . Since gas condensate production i s

included in Soviet petroleum production figures, but is no t

included in the estimates of refinery throughput, a dummy deman d node for gas condensate (18 million tons in 1980) is included i n the network near its center at Kuybyshev .

Foreign demand nodes represent petroleum exports, whic h totalled about 119 million tons in 1980 (of which 73 million wen t to the Eastern European countries of CMEA) [WEFA, 1983] .

Approximately 7 million tons were imported in 1980, making Sovie t net exports about 112 million tons . This amount is allocate d among four demand nodes . Exports to Poland, Czechoslovakia, Eas t

4 0 Germany and Hungary (58 .5 million tons) are assumed to be entirel y

through the " Friendship" Pipeline . These exports are represente d

by demand nodes located at Uzhgorod and Brest, the pipeline' s

terminii at the Soviet border (Figure 5) . Exports to East German y

and Poland (32 .7 million tons) are assigned to Brest, whil e

exports to Czechoslovakia and Hungary (25 .8 million tons) ar e

assigned to Uzhgorod . Exports to Bulgaria and Romania (14 . 2

million tons) are assumed to be shipped by tanker from Novorossys k

on the Black Sea, and are represented by an export demand nod e

there . All remaining net exports are allocated to a foreig n

demand node at Ventspils, the Baltic Sea port (Figure 5) .

In addition to these supply and demand nodes, 58 intermediat e nodes are added to the network to allow for junctions, changes i n capacity, and proper geographic alignment . Nearly half of thes e are on railroad connections to remote refineries in Central Asi a and the Far East that are not served by the main pipeline syste m

(Figure 5) .

Bounded arcs represent pipelines and other transport links i n the system . The capacity of each arc is set by an upper boun d determined solely by the size of the pipe, without taking int o account possible differences in pumping capacity . The averag e carrying capacities for the various pipeline sizes are given i n

Dienes and Shabad [1979, p . 63] . These range from an annual rat e of 8 million tons for a 530 mm (20 inch) pipe to 75 million ton s for a 1220 mm (48 inch) pipeline . Pipeline alignments and size s

4 1 are taken from several sources, the most important of which ar e

Dienes and Shabad, various " News Notes " in Soviet Geography ,

Yufina [1978], Shcherbina et al . [1981], and various issues o f

Neftyanoye khozyaystvo .

In addition to pipelines, arcs represent major tanke r

movements in the Caspian and rail traffic to Central Asia and th e

Far East . In 1980, about 91% of crude moved by pipelin e

[Biryukov, 1981, p . 7], with some movement by rail to supply th e

small remote refineries in Central Asia and the Far East not o n

the main pipeline system as well as some movement by tanker in th e

Caspian . River traffic (principally along the Volga) i s

negligible and ignored [Dienes and Shabad, 1979, p . 63] . In th e

Caspian, sea routes between the major ports are included (Figur e

5) . The refineries at Khamza and Fergana in Uzbekistan are linke d

to Krasnovodsk in Turkmenia and Pavlodar in Kazakhstan by arc s

representing railroads . The refineries at Komsomol'sk an d

Khabarovsk in the Far East are linked by railroad with Angars k

(Figure 5) . No data are available to determine transmissio n capacities for these sea and rail arcs, so the model is allowed t o determine the optimal flows of crude in the affected area s unhindered by capacity constraints . This does not significantl y affect the overall solution because the amounts shipped ar e relatively small . Refinery throughput in Central Asia and the Fa r

East was only about 5% of the USSR total in 1980 (Table 5) .

4 2 Distance is used as a surrogate for transportation cost in th e

model, as there is a close correlation between such costs an d

distance, especially in pipelines [Tretyakova, 1984] . Distance s

are calculated from the latitude and longitude of the termina l

nodes for each arc, making the length of an arc the cost o f

utilizing it . Pipeline transport costs per ton—kilometer in th e

USSR are about half rail cost and for tankers, costs are 60—70 %

those of rail [Tretyakova, 1984 ; JPRS, 1984] . Because of thi s

differential in cost among the modes, distances for arc s

representing rail or tanker shipments therefore are doubled .

B . Model Result s

The spatial pattern of model—generated flows for 1980 is show n

in Figure 6 . The pattern is dominated by the flow from the Wes t

Siberian oil fields to refineries in the western USSR . This flo w

occurs along two basic routes . The largest (190 million ton s

between Surgut and Tobol ' sk) is along the older route from Surgu t

through Tobol'sk to Ufa and Kuybyshev . The magnitude of the flo w

is approximately at assigned capacity (195 million tons) . Th e

second flow of 75 million tons follows the new northern route fro m

Surgut through Perm' to Gor'kiy and Yaroslavl' . This flow is a t

the rated capacity of the line, implying that its construction wa s warranted . Thus the movement of petroleum from West Siberi a westward is roughly at transmission capacity .

4 3 These results indicate that additional pipeline capacity fro m

West Siberia may be needed in the future, although there is only a modest increment planned for West Siberian output . In fact, i n

1983 West Siberian production did not fulfill the plan for th e first time [ " News Notes, " SG-April 1984, p . 265] and it no w appears doubtful if even the modest increment planned will b e attained . Full utilization of a new pipeline would require a significant increase in West Siberian petroleum production, so th e need for additional pipeline capacity from West Siberia i s questionable . The current difficulties and uncertainties in th e

West Siberian fields are reflected in the obscure status of ne w pipeline construction from the region .

The current five-year plan originally included the construction of a pipeline from Noyabr ' sk (Kholmogory) in Wes t

Siberia to Kuybyshev in the Volga region ["News Notes," SG-Apri l

1982, p . 282] . The line was slated to follow the new norther n route through Surgut as far as Perm' before turning south (Figur e

5) . The Noyabr'sk-Kuybyshev line appears to have been realigned , going from Novyabr ' sk to Perm ' as originally planned, but the n extending from Perm' to Klin, near Moscow . The section betwee n

Perm' and Klin is scheduled for completion in 1984 [Stroitel'stvo ,

1984, p . 4] . Apparently, the Noyabr'sk district is considered t o hold considerable promise, although production so far has bee n disappointing and far below expectations ["News Notes," SG-Apri l

1984, pp . 265-267] . The Urengoy gas condensate line, originall y

4 4 scheduled to feed into the new line from Kholmogory, now has bee n

re—oriented to an intra—regional connection within West Siberia t o

the new petrochemical center at Tobol'sk .

The largest single flow in the system is between the oi l

fields in Kuybyshev Oblast and the Kuybyshev refinery complex (28 2

million tons, or about 47% of national production), as the Wes t

Siberian flow is joined by production from the Volga—Urals field s

(Figure 6) . This massive flow is just under the assigned capacit y

for the arc (287 million tons) .

At Kuybyshev, the main flow from West Siberia (augmented b y

Volga—Urals production) bifurcates, with a flow of 152 millio n tons following the "Friendship" Pipeline to the western border a t

Uzhgorod and Brest, while the other flow of 86 million tons goe s south through Saratov to the Ukrainian refineries and the Nort h

Caucasus . It is here rather than farther east that the arc s become capacitated (i .e ., flow is equal to or greater tha n

initially assigned capacity) . The flow between Kuybyshev an d

Syzran' required to make the solution feasible is 152 millio n tons, or 127% of the arc's assigned capacity, and the Saratov —

Volgograd arc is capacitated with a flow of 31 million tons, 24 % over assigned capacity (Figure 6) . This indicates that extr a capacity is needed at these points for the efficient distributio n of crude petroleum .

Another area requiring more capacity will be the pipelin e between Tobol'sk and Omsk . In 1980, this line is modeled a s

4 5 carrying 46 million tons, approximately its assigned capacity o f

45 million tons . This flow supplies the demand at Omsk an d

Pavlodar as well as the Uzbek refineries after crude apparently i s transshipped to rail for distribution southward from Pavlodar .

When the new refineries at Chimkent and Neftezavodsk and th e second unit at Pavlodar come onstream (the refineries at Fergan a and Khamza in Uzbekistan also will be connected into the mai n pipeline system), an additional flow of 20 to 24 million tons wil l be required through the Tobol'sk—Omsk line. Since the line i s already apparently fully utilized, carrying capacity betwee n

Tobol'sk and Omsk will have to be expanded by a like amount .

Surprisingly, the model indicates that the major transmissio n difficulties in 1980 existed in the European USSR rather than Wes t

Siberia, particularly in the older petroleum—producing areas i n the North Caucasus and Azerbaijan . As local production in thes e areas has dropped since 1970, crude has had to be brought in fro m the Volga—Urals region and then West Siberia to keep thei r refineries opearting . All three lines into the area in 1980 ar e shown as capacitated : Saratov—Volgograd, Lisichansk—Gorlovka an d

Saratov—Astrakhan (Figure 6) . Demand at Novorossysk, Tuapse, an d

Krasnodar is shown as being largely met by West Siberian crude , but supply problems exist further south .

These constraints in the pipeline network force Caspian tanke r traffic to occur despite its high cost as the model attempts t o satisfy refinery demand in the area . The model produces a flow o f

4 6 4 million tons to Baku across the Caspian Sea from the Turkme n

republic and a flow of 8 million tons from Astrakhan . There i s

also an unrealistic allocation of Siberian crude through Pavloda r

and the Central Asian rail network to Krasnovodsk for furthe r

shipment by tanker to Baku (Figure 6) . This evidently result s

from the absence of transshipment costs in the model . The mode l

evidently uses this flow from Turkmenia to replace the know n movement of Mangyshlak crude to the Baku refineries . The length s

to which the model must go to satisfy demand at Baku illustrate s why a shortage of crude has caused the Baku refineries to operat e at less than full capacity in recent years ["News Notes," SG—Apri l

1984, p . 268] .

The capacitated lines at Lisichansk and Saratov allow only a half a million tons to trickle through Tikhoretsk to Groznyy an d

Baku, while it is known that a much larger volume of West Siberia n crude has to be brought in to supply the Groznyy refinerie s because of the decline in local production [Sagers, 1984, p . 31] .

Thus although not entirely accurate because of modelin g deficiencies, the flow pattern in the Caucasus illustrates th e difficulties engendered in the area by the decline of loca l production in the last 10 years .

The various transmission difficulties noted above largel y confirm the need for two post—1980 developments in the Sovie t distribution system . One is the extension of the new norther n pipeline from Yaroslavl ' to Novopolotsk, accomplished in 1981, an d

4 7 the other is an important new line connecting the West Siberia n

oil fields with Baku through Saratov, Volgograd and Groznyy, whic h

went into operation in 1983 ["News Notes," SG-October 1983, pp .

625-627) .

A second run of the model was done incorporating these arcs .

The addition of the Yaroslav l ' -Novopolotsk arc lowers total syste m costs by 2 .5%, a significant improvement in efficiency . Thi s represents a savings of 29 .2 billion ton-kilometers in the model , which translates into about 32 million rubles in operating cost s per year .* This additional arc also allows some of the demand a t

Novopolotsk, Mazeikiai, and Ventspils to be served from the north , easing the constraint between Kuybyshev and Syzran' . While th e

Kuybyshev-Syzran ' arc was capacitated in the previous run with a flow of 152 million tons, the flow drops below its assigne d capacity to 115 million tons with the addition of the Yaroslavl' -

Novopoltsk arc . Furthermore, the construction of the line to Bak u alleviates considerably the supply problems noted previously fo r the Caucasus, although the situation here remains tight .

* The average cost for transporting petroleum by pipeline i n 1980 was 1 .12 rubles per thousand ton-kilometers [Tretyakova , 1984] .

4 8

C . Conclusion s

Except for some flows in the Caucasus and Caspian Sea, th e

hypothetical flow patterns generated by the model generally agre e

with what little information exists on actual Soviet petroleu m

flows . Total transport costs for the model in billion ton —

kilometers is 90% of the actual total for the USSR in 1980 (1128 . 3

versus 1256 .9 billion ton-kilometers) [Tretyakova, 1984] . Sinc e

the model appears to adequately simulate the Soviet system, thi s

implies that overall, the Soviet pipeline network seems to b e

operating relatively efficiently .

Several interesting conclusions stem from the analysis .

First, the main transport constraints in the system in 1980 wer e

. in the European USSR, in the older oil—producing areas, rathe r

than in the east at the origin of most of the USSR ' s petroleum .

Second, this problem evidently has been alleviated to a consider -

able extent by the construction of additional pipelines in th e

region, so the model correctly anticipates subsequen t

developments . Third, the new line constructed from Surgut t o

Novopolotsk greatly increased the efficiency of petroleu m

transmission, supporting the necessity of its construction .

Fourth, the model shows the pipelines from West Siberia t o

4 9 the European USSR to be operating close to capacity in 1980 . Thi s indicates the reason why a new pipeline is being constructed t o

Klin, although relatively little output growth is anticipated fo r

West Siberia in the 11th Five—Year Plan .

5 0

Figure 5 . The Soviet Petroleum Network

Figure 6 . Petroleum Flows in 1980

Table 4

PETROLEUM SUPPLY NODES

1980 productio n Field/region Location (million tons )

Surgut Surgut 9 0 Samotlor Nizhnevartovsk 150 Ust—Balyk Nefteyugansk 4 9 Sosino—Sovetskoye Strezhevoy 5 Kholmogory Noyabr'sk 3 Uray (Shaim) Uray 1 0 Vasyugan Srednyy Vasyugan 5 Perm ' Chernushka 2 3 Bashkir Tuymazy 1 7 Bashkir Neftekamsk 1 7

Tatar Almet ' yevsk 8 2 Orenburg Buguruslan 1 3 Kuybyshev Otradnyy 1 3 Kuybyshev Neftegorsk 1 3 Mangyshlak Uzen' 1 4 Emba Makat 4 Turkmenia Kotur—Tepe 8 Azerbaijan Baku 1 4 Chechen—Ingush Groznyy 7 Eastern Ukraine Chernigov 6

Western Ukraine Ivano—Frankovsk 2 Belorussia Rechitsa 2 Komi Usinsk 2 0 Stavropol' Neftekumsk 6 Krasnodar Neftegorsk 4 Dagestan Yuzhno—Sukhokumsk 2 Udmurt Arkhangel'skoye 8 Other Volga Volgograd 4 Georgia Tbilisi 3 Fergana Andizhan 1 Sakhalin Okha 3

Sources : "News Notes," Soviet Geography, April 1982, pp . 177—283 ; Mazover [1982, p . 100] ; Dienes and Shabad [1979, Chapter 3] .

5 3

Table 5

DOMESTIC PETROLEUM DEMAND NODE S

1980 198 0 Throughput Throughpu t Refinery/city (million Refinery/city (millio n tons) tons )

Achinsk 0 L'vov 1 Angarsk 23 Mazeikiai 7 Baku (three plants) 25 Moscow 1 0 Batumi 5 Mozyr' 1 2 Chimkent 0 Nadvornaya 2 Drogobych (two plants) 2 Neftezavodsk 0 Fergana 7 Nizhnekamsk 8

Gor'kiy 25 Novopolotsk 2 3 Groznyy 15 Odessa 3 Gur'yev 6 Omsk 2 6 Ishimbay—Salavat (two) 10 Orsk 4 Khabarovsk 2 Pavlodar 8 Khamza 2 Perm' 1 1 Kherson 6 Ryazan' 2 0

Kirishi 20 Saratov 6 Komsomol'sk 3 Syzran' 1 2 Krasnodar 2 Tuapse 3 Krasnovodsk 8 Ufa 3 6 Kremenchug 16 Ukhta 2 Kuybyshev (two plants) 34 Volgograd 1 0 Lisichansk 15 Yaroslavl' 1 1

Sources : Sagers [1984, pp . 20—21] .

Section III . REFERENCE S

Biryukov, 1981 : V . Ye . Biryukov . Transport v odinnatsato y pyatiletke (Moscow : Znaniye, 1981) .

Dienes, 1983 : Leslie Dienes . " Soviet Energy Policy and th e Fossil Fuels, " in Robert G . Jensen et al . (eds .) . Sovie t Natural Resources in the World Economy (Chicago : University of Chicago Press, 1983), pp . 275—295 .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . Th e Soviet Energy System : Resource Use and Policie s (Washington, D .C . : Winston and Sons, 1979) .

JPRS, 1984 : Joint Publications Research Service . Soviet Union : Transportation, JPRS UTR—84—023, 7 August 1984, p . 32 .

Mazover, 1982 : Ya . A . Mazover (ed .) . Problemy razvitiya i razmeshcheniya toplivnykh baz SSSR (Moscow : Nauka, 1982 )

"News Notes, " SG— ... : Theodore Shabad . "News Notes, " Soviet Geography : Review and Translation : Vol . 16, no . 2, (February 1975), p . 122 . Vol . 19, no . 4 (April 1978), p . 275 . Vol . 23, no . 4 (April 1982), pp . 177-28 3 Vol . 23, no . 4 (April 1982), pp . 177-283 . Vol . 24, no . 4 (April 1983), p . 216 . 24, no . 8 (October 1983), pp . 625-627 . Vol . 25, no . 4 (April 1984), pp . 264-268 .

Pravda, 22 July 1984, p . 1 .

Sagers, 1984 : Matthew J . Sagers . "Refinery Throughput in th e USSR . Center for International Research, CIR Staff Paper , No . 2 (Washington, D .C . : U .S . Bureau of the Census, 1984) .

Shcherbina et al ., 1981 : B . Ye . Shcherbina et al . Otechestvennyy truboprovodnyy transport (Moscow : Nedra, 1981) .

Stroitel ' stvo, 1984 : Stroitel ' stvo truborovodov, No . 1 (Januar y 1984), p . 4 ; No . 2 (March 1984), pp . 2—4 .

Tretyakova, 1984 : Albina Tretyakova . Expenditures on Fuels i n the USSR to 1990 . Foreign Economic Reports, No . -- (Washington, D .C . : U .S . Bureau of the Census [forthcoming] )

5 5

WEFA, 1983 : Wharton Econometric Forecasting Associates, Inc . DATA BANK, 1983 .

Yufina, 1978 : V . A . Yufina . Truboprovodnyy transport nefti i gaza (Moscow : Nedra, 1978) .

5 6

IV . THE DISTRIBUTION OF REFINED PETROLEUM PRODUCT S

A . Introductio n

The Soviet economy has traditionally shown an aggregate energ y intensity high by international standards, with no evidence of an y recent decline [Levcik, 1981, p . 388 ; Dienes, 1983, pp . 276-278] .

This energy intensiveness is particularly true for the economy' s main energy input, petroleum [Thornton, 1983] . In 1980, petroleum accounted for about 45% of Soviet fossil fuel production and abou t

38% of consumption [Dienes, 1983, pp . 285-286] .

Of course, the Soviet economy does not actually consum e petroleum in its crude form, but rather consumes it as refine d products . According to U .N . estimates, the total output of al l products from Soviet refineries in 1980 was about 436 .5 millio n tons [U .N ., 1983, p . 579],* which includes 149 million tons o f mazut, 73 .5 million tons of gasoline, 36 million tons of kerosene , and 115 million tons of diesel fuel and medium heating fuel [U .N .,

1983, pp . 427, 451, 495, 517] .

* The U .N .'s estimates of total output as well as th e disaggregation by product generally agree with those prepared b y Tretyakova [1980] of the U .S . Census Bureau . The main differenc e between them is the amount of mazut produced and consumed, as som e is utilized for further refining rather than consumed directly .

5 7 Once produced, these products then must he distributed t o consumers throughout the huge area of the USSR . This enormou s task is handled largely by the railroads, as they accounted fo r

79 .2% of primary shipments (i .e ., those from the refineries) o f refined products in 1981 (Table 6) . Rail dominates primar y shipments of refined products even in areas of bulk movement s

[Dienes and Shabad, 1979, p . 63] . Petroleum freight is second i n importance to coal in generating rail traffic, in 1980 accountin g for 13 .4% of all railroad ton—kilometers and 11 .3% of all ton s originated in 1980 [Narkhoz SSSR 1980, pp . 295-296] . Thus th e distribution of refined products contributes significantly to th e heavy burden on the Soviet railroads [see Hunter and Kaple, 1983] .

This is because the transport of refined products by river an d sea tankers is fairly minor (Table 6) and product pipelines, th e least costly transport mode (see below), remain underdeveloped .

Of the total oil pipeline network of 69,700 kilometers in 198 0

[Narkhoz SSSR 1980, p . 305], only 11,300 kilometers carrie d refined products [Vlasov, 1984, p . 21], so only 11—12% of refine d products moved by pipeline in 1980 (Table 6) [Biryukov, 1981, p .

7], or approximately 55 million tons .

However, the situation for product pipelines has bee n improving, relieving some of the congestion on the Sovie t railroads . The tonnage carried by products lines increased by 40 % between 1976 and 1980 as the network expanded by two thousan d kilometers [Biryukov et al ., 1982, p . 31] . A vigorous developmen t program also was scheduled for 1981—85 in the 11th Five—Year Pla n

5 8 (FYP), with the construction of about 6,500 kilometers of ne w

pipeline for petroleum products planned in order to increase th e

tonnage carried by about 30% ["News Notes," SG-April 1982, p .

282] . By 1982, shipments by pipeline were 63% greater than the y

had been in 1975 [Grigor'yev et al ., 1984, p . 60] .

This section of the report examines aspects of the problem o f

transporting petroleum products in the USSR . This is particularl y

difficult to evaluate because of very limited information o n

refinery size and output mix, regional consumption levels, an d

transport capacity . However, the limited data available have bee n

assembled to allow the Soviet distribution system of 1980 to b e modeled as a capacitated network . A network allocation model i s applied to generate optimal hypothetical flows for the system .

The purpose is to indicate general patterns of circulation an d refinery utilization rather than to replicate reality in detail .

This exercise is important because almost nothing is know n about the overall magnitude or direction of actual flows o f refined products in the USSR . It also is useful in evaluating th e locational efficiency of new refinery construction becaus e refineries in the USSR are now market-oriented [Khrushchev, 1969 , pp . 196-198 ; Dienes and Shabad, 1979, p . 64] . This is because th e cost of distributing petroleum products from the refineries ha s become greater than that in shipping crude with the development o f a pipeline distribution system for crude petroleum .

5 9 The out-of-kilter algorithm (OKA) is applied to an abstrac t network of the Soviet distribution system, consisting of suppl y nodes (oil refineries), demand nodes (major cities, mazut-burnin g electrical power stations, and export points), and bounded arc s

(railroad lines, products pipelines, and some tanker routes )

(Figure 7) .

Supply nodes in the network are the Soviet refineries o r refinery complexes if more than one plant exists in a city . I n

1980, there were 42 of these refinery locations . The suppl y availability at each is determined by their annual primary crud e throughput (Table 5), although there is actually a loss durin g refining that varies from plant to plant, but averaged 1 .25% i n the USSR in 1980 [Ekon . gazeta, November 1981, p . 2] .* Th e available supply at the refineries is not differentiated b y product since data on the output mix of individual refineries ar e practically nonexistant .

* Thus the U .N . estimate of total refinery output in 1980 (436 . 5 million tons) is in agreement with the estimate of aggregat e refinery throughput of crude of 441 million tons by Sagers [1984 , p . 10] after subtracting refinery losses . However, petroleu m products are also derived from the refining of gas condensate a s well as crude petroleum . These products are believed to consis t largely of petrochemical feedstocks, gasoline, and diesel fue l [see Sagers, 1984, p . 11] .

60 Demand nodes in the system consist of export points i n

addition to the USSR ' s large cities and major mazut—burning powe r

stations . The only attempt to disaggregate consumption by produc t

is for mazut, the principal output of Soviet refineries .

Essentially then, the distribution of an undifferentiated class o f

refined products is being modeled . Discrepancies that exis t

between the output mix of refineries and local consumption o f various products are ignored, although anecdotal evidence in th e press suggests that they are quite significant [see also Gankin e t al ., 1972, pp . 113—119 ; "News Notes," SG—September 1969, p . 423 ;

December 1976, p . 714] . Unfortunately, data are not available t o

incorporate this aspect into the model .

Net exports of petroleum products, estimated to be about 4 2 million tons in 1980 ["News Notes," SG—April 1982, p . 283 ; WEFA ,

1983 ; U .N ., 1983], are assigned equally to export points at Brest ,

Uzhgorod, L ' vov, Grodno, Odessa and Ventspils (i .e ., 7 millio n tons each) .

About 35% of Soviet consumption of refined products in 198 0 consisted of mazut (132 .5 million tons) [U .N ., 1983, p . 517] .

Evidently, most of this is used as fuel in electrical powe r stations, as 114 .8 million tons of mazut were used by the Ministr y of Electrical Power in generating electricity [Nekrasov an d

Troitskiy, 1981, p . 230] .

The regional distribution of mazut consumption by electrica l power stations can be estimated from several pieces of dat a

6 1 [Nekrasov and Troitskiy, 1981, pp . 232, 224, 225, 228 ; Fedorov e t al ., 1981, p .7] . Thus consumption of mazut by electrical station s in the Urals in 1980 was approximately 4 .1 million tons, in th e

Volga region, 26 .0 million tons, in West Siberia, 1 .4 millio n tons, in East Siberia, 0 .3 million tons, in Kazakhstan and Centra l

Asia, 4 .7 million tons, in the other European regions, 76 . 4 million tons, and in the Far East, 1 .6 million tons . Thes e regional totals are allocated among the 37 major mazut-burnin g stations (all known stations over 300 MW) according to installe d generating capacity . Only half of the capacity of stations usin g mazut for part of the year is used in determining the allocation .

Since there are no major mazut—burning stations in the Far East , the regional total (1 .6 million tons) is allocated equally amon g the three major cities (Vladivostok, Khabarovsk and Komsomol'sk ) to reflect consumption by local heat and power plants (TETs) .

Large cities are utilized to represent consumption sites othe r than electrical stations . A total of 279 .7 million tons , representing the rest of apparent domestic consumption of refine d products (i .e ., total refinery output--436 .5 million tons--les s net exports--42 million tons--less consumption by electrical powe r stations--114 .8 million tons), is allocated among the cities o f the USSR according to population size . City size is used as it i s known to reflect the relative industrial importance of the city a s well as the size of its housing and communal economy [Huzinec ,

1978], two of the largest consumers of petroleum products in th e

62 USSR . In 1972, they accounted for 41 .1% and 11 .0% of domesti c demand, respectively [Kurtzweg and Tretyakova, 1982, p . 366] .

Unfortunately, an allocation based on this criterion does no t necessarily directly reflect regional consumption patterns by tw o other major consuming sectors, agriculture and transportation . I n

1972, they each accounted for about 15% of domestic consumptio n

[Kurtzweg and Tretyakova, 1982, p . 366] . However, the spatia l distributions of agriculture and transportation generall y correspond to that of the population as a whole [see Lydolph ,

1979, pp . 236, 242, 447] .

A total of 270 nodes are included, comprising all cities ove r

100,000 in 1980 as well as all oblast centers . The allocation fo r

Moscow includes the population of neighboring cities over 100,00 0

(e .g ., Balashikha, Zagorsk, Zelenograd, Mystishchi) as does tha t for Leningrad and Kuybyshev . The largest demand node is Moscow , consuming an estimated 27 .2 million tons of refined products, plu s another 5 .9 million tons of mazut for its power stations, whil e

Leningrad's demand is only about half this (13 .6 million tons) .

The other nodes are all much smaller . For example, Khar'kov' s allocation is 4 .1 million tons, with allocations for many of th e smaller cities at 0 .2 to 0 .3 million tons .

These data are aggregated by region and shown as a percentag e of the national total in Table 7 . According to these data, th e two largest consuming regions are the Center and the Ukraine , followed by the Volga region . These data are further aggregate d

6 3

into larger regional groupings (Caucasus, Ural—Volga, othe r

European, and Asian) in order to compare them with available 196 9

data given in Gankin et al . [1972, p . 104] (Table 8) . Thi s

comparison suggests that the consumption estimates for 1980 appea r

reasonable .

In addition to these supply and demand nodes, 95 intermediat e

nodes are added to the network to allow for junctions and prope r

geographic alignment in the transportation system . All th e

intermediate nodes are cities or towns .

Bounded arcs represent rail lines, products pipelines, an d

tanker routes . Automobile transport is ignored since it is mostl y

used for local distribution rather than primary movements from th e

refineries {Table 6) . The alignment of the rail lines is take n

from several Soviet maps and atlases showing the railroad network .

All known products pipelines from refineries and their alignment s

are given in Sagers [1984] .

Arcs representing major tanker movements are added only fo r

cities not served by rail, such as between Noril'sk and Murmansk ,

Magadan, Petropavlovsk—Kamchatskiy, and Yuzhno—Sakhalinsk an d

Vladivostok, and Abakan and Kyzyl, in addition to the tanke r

routes between the major Caspian ports . Nearly 67% of all se a

shipments of petroleum products occur in the Caspian, and 78% o f

all shipments by river tanker are in the Volga—Kama basi n

[Grigor'yev et al ., 1984, p . 61] . In fact, 60% of all rive r

6 4 shipments originate at only three ports : Kuybyshev, Ufa, an d

Kambarka [Grigor ' yev et al ., 1984, p . 61] .

Each of the products pipelines carries less than 10 millio n

tons per year, as they are mostly around 14—20 inches in diameter ,

but no data are available to determine annual transmissio n

capacities for the other arcs . As a result, the model is allowe d

to determine the optimal flows practically unhindered by capacit y

constraints on the arcs . A limit of 40 million tons is assigne d

to all arcs, an amount exceeding the output of any singl e

refinery . But only a few arcs, such as that connecting the Mosco w

refinery to the demand node representing the city, require mor e

than 20 million tons of capacity, and none requires more than 3 0 million tons .

Distance is used as a surrogate for transportation cost in th e model, as there is a close correlation between such costs an d distance . No attempt is made to differentiate costs between th e various transport modes although in the USSR pipeline transpor t costs per ton—kilometer for petroleum are considerable less tha n those of rail, and tanker costs are in between [Shafirkin, 1978 , pp . 222—223 ; Dubinskiy, 1977, p . 15 ; JPRS, 1984, p . 32 ;

Tretyakova, 1984] . Distances are calculated from the latitude an d longitude of the terminal nodes for each arc, making the length o f an arc the cost of utilizing it .

6 5 B . Model Result s

The Soviet distribution system for refined products i s

analyzed in two parts . The first examines flows in the network a s

it existed in 1980, while the second examines the pattern of flow s

and refinery utilization with the addition of all planned refiner y

expansions of the 11th FYP (1981—85) .

The modeled flows are shown in Figure 7 . Because consumptio n

and production of petroleum products are relatively decentralized ,

the flows are fairly small . Most flows are less than 3 millio n

tons . Only 46 arcs of the over 1000 arcs in the system have flow s

of over 10 million tons, and only 6 of these have flows of over 2 0

million tons . These few arcs with the larger flows are usuall y

the initial outlet from a refinery into the network . The larges t

single flow in the network is 30 million tons, from Syzran' t o

Penza . This is in fact mentioned as a major supply route fo r petroleum products from the large Volga refineries west to centra l

Russia and south to the Ukraine and North Caucasus [Kazanskiy ,

1980, p . 41] .

Relatively small distribution areas for each refinery ar e delimited, as the flow pattern is predominantly local i n character . There are few long distance inter—regional flows .

However, there are some exceptions to the general pattern of loca l distribution . Products from the large Volga refineries (e .g . ,

Kuybyshev, Syzran', Ufa) are shown as moving to the west and sout h

6 6 considerable distances into central Russia, the Ukraine, and th e

North Caucasus (Figure 7) . These movements are described b y

Kazanskiy [1980, p . 41) as reaching to Moscow, Khar'kov, an d

Novorossysk .

Distribution from the Omsk refinery encompasses a large are a in West Siberia, extending from the Urals to the Kuznets Basin an d from Surgut to southern Kazakhstan and Central Asia (to Dzhambu l and Frunze) (Figure 7) . The smaller refineries at Gur'yev an d

Krasnovodsk are the least-cost supply points for large areas o n the eastern side of the Caspian Sea in Turkmenia, Uzbekistan, an d

Kazakhstan because of the sparse population and limited demand i n the region . The Angarsk refinery serves a huge area, extendin g from the cities of the Kuznets Basin to the Pacific . Even so ,

Angarsk ' s capacity is not fully utilized in the solution .

Interestingly, the Omsk and Angarsk refineries are mentioned a s being too large for the efficient distribution of refined product s in their areas [Oil and Gas, 1984, p . 26] .

The localized flows result from the assumption of a unifor m output mix at all refineries and a product-undifferentiate d consumption pattern . The magnitude of the discrepancy whic h actually exists between refinery output and local consumption i s indicated by the difference between total ton-kilometer s

(transport costs) generated by the model and actual ton-kilometer s incurred in moving refined products as well as in the differenc e between the actual and modeled average length of haul .

6 7 In 1980, petroleum freight turnover on Soviet railroads wa s

460 .8 billion ton-kilometers, which includes 96 .5 billion ton - kilometers incurred in carrying crude petroleum rather tha n refined products [Tretyakova, 1984] . Thus only about 364 billio n

ton-kilometers were incurred in carrying refined products by rail .

In addition, there were 36-37 billion ton-kilometers generated b y movement through products pipelines and other amounts of freigh t traffic on river and sea tankers (about 40 and 16 billion ton - kilometers, respectively) . Thus the actual freight turnover o f refined products in primary movements in 1980 would be around 45 8 billion ton-kilometers . However, model-generated costs amount t o only 228 billion ton-kilometers, or about 50% of this total .

The average length of haul for refined products in 1981 wa s

967 kilometers (Table 6) . For rail shipments it was 97 3 kilometers, and on products pipelines it was 706 kilometers (Tabl e

6) . In 1980, the average length of haul for all petroleu m products was 997 kilometers [Grigor'yev et al ., 1984, p . 61] , whereas that for the modeled flows is only 522 kilometers .

The significant differences between the model and reality i n total ton-kilometers generated and average length of haul impl y that the distribution of refined petroleum products is not ver y efficient . The extra 228 billion ton-kilometers incurred i n distributing refined products (the difference between the modele d and actual flows) cost around 57 billion rubles, as the averag e cost for shipping refined products by rail is around 250 ruble s

6 8 per thousand ton-kilometers [Shafirkin, 1978, pp . 222-223] . A major reason for this discrepancy is apparently the mismatc h between the structure of local consumption and refinery output .

Also, anecdotal evidence suggests that products are not alway s obtained from the nearest source of supply .

Another factor for the discrepancy between the model an d reality is seasonal differences in consumption mix, and thus , i n refinery output . During the winter, more heating fuel and mazu t are needed because of increased heating requirements and th e seasonal switch by "buferniy" electrical stations from gas t o mazut [Grigor'yev and Zorin, 1980, p . 16] . The general lack o f reserve capacity in primary refining has meant that the need fo r extra mazut in winter has been met by utilizing catalytic cracking capacity to produce mazut rather than light products [Tretyakova ,

1982] . Because catalytic cracking capacity is limited and a t relatively few refineries [Sagers, 1984], this undoubtedl y generates a considerable volume of crosshauls . Some of this extr a traffic would be over fairly long distances because the Siberia n refineries at Omsk and Angarsk are relatively well-equipped wit h secondary processing [Sagers, 1984], while mazut accounts for a small share of the fuel balance of eastern electrical station s

[Nekrasov and Troitskiy, 1981, p . 232] .

The difference between model-generated costs and thos e actually incurred imply that significant potential exists fo r reducing transportation costs by greater rationality in suppl y

6 9 relationships and in improving the match between refinery outpu t

mix and local consumption patterns . Improving the match betwee n

refinery output mix and local consumption patterns is possibl e with the planned transition of the industry to deeper refining i n

the 11th FYP [Ekon . gazeta, November 1981, pp . 1—2 ; Tretyakova ,

1982] . This program involves the expansion of catalytic crackin g capacity to produce more light products per ton of oil refined ; i .e ., deepening the refining process through greater secondar y processing . But in the context of the transportation problem , catalytic cracking also provides greater flexibility in the outpu t mix, which would allow it to be adjusted to local consumptio n patterns and seasonal variations .

This inefficiency in distributing refined products is i n contrast to the overall efficiency noted in transportin g electricity, gas, and crude petroleum in the USSR [Sagers an d

Green, 1982 ; 1984a ; 1984b ; Sections II, III, and VI of thi s report] . It is interesting to note that the Soviet distributio n networks operating near optimum efficiency are those which handl e a fairly homogeneous commodity in a unique transportation system .

In contrast, refined products are distributed largely by a commo n carrier (the railroad) and are heterogeneous in nature .

Apparently it is this extra complexity as well as the mor e fragmented system of decision—making for railroad shipments whic h inject inefficiency into the transportation problem .

7 0 The model also provides an opportunity cost for each of th e refineries as part of an optimal solution . These opportunit y costs show how much transport costs would be decreased if mor e capacity were available at each site (Table 9) . They indicate th e refinery with the highest opportunity cost is L ' vov . At L ' vov, a n additional ton of capacity would decrease transport costs in th e system by 25 .9 million ton—kilometers . With an average cost o f

250 rubles per thousand ton—kilometers for shipping refine d products by rail, each additional ton of capacity at L ' vo v therefore would save about 6 .5 million rubles annually i n transport costs . This is probably more than enough to warran t construction since the cost of constructing a new 6 million to n refining unit is 37 million rubles [Sredin and Lastovkin, 1972, p .

33] .

Differences in opportunity costs tend to be regionalized , reflecting the availability of supply relative to demand . Th e highest opportunity costs are at refineries in the western Ukrain e

(L'vov, Drogobych, and Nadvornaya) and the Far East (Krabarovs k and Komsomo l ' sk) (Table 9) . The shortage of petroleum products i n these regions is mentioned by Danilov et al . [1983, pp . 355, 383 ] and Biryukov et al . [1982, p . 30] . In the case of the Far East , this is because only 5 million tons of products are produced i n

7 1 the region, but consumption is estimated to be 8 million tons . *

This necessitates the shipment of 3 million tons of refine d

products from Angarsk, a distance of over 2300 kilometers . In th e

case of the western Ukraine, only 5 million tons are produced i n

the Southwest region, but estimated consumption is 13 .4 millio n

tons, and another 14 million tons are needed for export throug h

Uzhgorod and L'vov .

Other areas with relatively high opportunity costs are th e

Baltic (Mazeikiai), Ukraine (Odessa, Kherson, Kremenchug ,

Lisichansk), and Belorussia (Mozyr', Novopolotsk) . The areas wit h

the highest opportunity costs would seem to be the most likel y

areas for refinery expansion in the 11th FYP . They are mostl y along the western border, and so partially reflect the demand fo r exports . In contrast, relatively low costs are found in th e

Volga, Caucasus, and Siberian regions, and unutilized capacit y exists in the model at Angarsk (10 million tons unutilized) ,

Krasnovodsk (2 million tons), and Baku (2 million tons) .

This pattern of utilization conforms reasonably well wit h what is known . A surplus of production is reported for the Urals -

Volga and Central regions, and a deficit exists in the Ukraine ,

Moldavia, Kazakhstan, Central Asia, the Baltic, and Far East , giving rise to a flow of tens of millions of tons of petroleu m

* Consumption is probably underestimated for the Far Eas t because of the significant role of the military in the region . This may also be true for East Siberia and Central Asia .

7 2 products between them [Biryukov et al ., 1982, p . 30] . Grigor'ye v et al . [1984, p . 60) reports that by the early 1980's, a surplu s also existed in Belorussia, the Volga-Vyatka region, and th e

Northwest .

It is also known that the Baku refinery complex i s underutilized, as the model suggests . However, this results fro m a shortage of crude rather than insufficient demand ["News Notes, "

SG-April 1984, p .268] . There is no evidence to indicate that th e

Angarsk refinery is underutilized, so this probably results fro m underestimating demand in the region because of the military . Bu t

it is known that the Angarsk refinery is the source o f considerable long-distance rail shipments to the Far East [ " New s

Notes," SG-November 1977, p . 702], which are in the solution .

Refinery expansion in the 11th FYP is designed to reduc e transportation costs by meeting the needs of these deficit area s

[Biryukovet al ., 1982, p . 30] . The success of Soviet planning i n achieving this goal can be evaluated by adding all new capacit y planned for the 11th FYP into the model . This includes additiona l units at Lisichansk, Mazeikiai, and Pavlodar, and th e establishment of new refineries at Achinsk (East Siberia) ,

Chimkent (southern Kazakhstan) and Neftezavodsk (Turkmenia )

[Sagers, 1984] . Since each unit has a capacity of about 7 millio n tons, this amount is added to the 1980 capacity of each (Table 5 ) in a subsequent model run .

7 3 In this second simulation, all of the new refinery capacity i s

fully utilized except for that at Neftezavodsk, where only 4 .8 o f the 7 million tons are drawn upon . Overall costs for the syste m drop by 23 .7% to 184 .1 billion ton—kilometers, a significan t improvement in efficiency . Therefore in general, the additiona l capacity at these particular sites seems warranted .

Although this new capacity alleviates some of the suppl y problems of the Ukraine, Baltic, Kazakhstan, and Central Asia, th e most severe shortcomings identified in the system, in the Far Eas t and the western Ukraine, still remain . Therefore in the future , these are the areas most likely to receive new refiner y capacity .* The Soviets announced that work would start durin g

1981—85 on a new refinery in Moldavia [ " News Notes, " SG—Apri l

1981, p . 275], but no announcements have been made on the progres s of construction . Interestingly, Grigor'yev et al . [1984, p . 60 ] implies that Moldavia and the Far East are being given firs t priority for new construction . The need for new refiner y construction in the Far East is reported by Danilov et al . [1983 , p . 355] .

However, it is important to note that about half of the need s of the refineries in the Far East are supplied with West Siberia n

* In fact, expansion in throughput capacity may have occurred a t Komsomol'sk in 1977 [Sagers, 1984, p . 53] .

7 4 crude by rail from Angarsk, rather than by pipeline . Thu s potential savings in transport costs for refined product s

resulting from the location of new refinery capacity in th e

region are not as great as they would otherwise be . Therefor e

perhaps the new Achinsk refinery in East Siberia, which is on th e main pipeline system, takes the place of expanded refiner y

capacity in the Far East .

C . Conclusion s

The surplus and deficit areas identified in the analysi s generally correspond to those existing in reality . Also, th e general pattern of model—generated flows corresponds to thos e

described in Krazanskiy [1980, p . 41] . In general, the location s

chosen for refinery expansion in the 11th FYP appear justified .

However, the pressing problem identified in the western Ukraine i s

not addressed, although plans for the construction of a ne w

refinery in Moldavia have been announced .

The analysis also shows that the distribution of refine d

products is relatively inefficient . The model generates onl y

about half of the actual level of freight traffic and an averag e

length of haul only 52% of that actually prevailing in 1980 . Thi s

7 5 implies the existence of significant potential for reducin g

transportation costs by improving the match between refiner y output mix and local consumption patterns as well as greate r rationality in supply relationships . This contrasts sharply wit h the efficiency evident in transporting electricity, crude oil, an d natural gas . This implies that Soviet planning is adequate fo r homogeneous commodities in unique transportation systems, but doe s not perform well with the complexity of heterogeneous products o n common carriers .

7 6 Figure 7 . Refined Product Flows in 198 0

Table 6 .

PRIMARY TRANSPORTATION OF PETROLEUM PRODUCTS IN 198 1

Freight Average Lengt h Shipments Turnover of Hau l Mode (%) (%) (km .)

Railroad 79 .2 79 .6 97 3 Pipeline 11 .3 8 .3 70 6 River tanker 6 .8 8 .7 123 6 Sea—going tanker 2 .7 3 .4 120 0

All modes 100 .0 00 .0 96 7

Source : Grigor ' yev et al . [1984, p . 61] .

Table 7

APPARENT CONSUMPTION OF REFINED PRODUCTS IN 198 0

Region Percen t

USSR 100 . 0

Northwest 7 . 5 Center 16 . 6 Volga—Vyatka 2 . 1 Central Chernozem 1 . 7 Volga 12 . 6 North Caucasus 5 . 4

Urals 6 . 1 West Siberia 4 . 7 East Siberia 2 . 3 Far East 2 . 1 Ukraine 16 . 2 Kazakhstan 4 . 7

Central Asia 4 . 5 Belorussia 5 . 2 Transcaucasus 4 . 7 Baltic 3 . 0 Moldavia 0 . 6

Source : Aggregated from city allocations and data in Table 2 .

Table 8

CONSUMPTION OF REFINED PRODUCT S

(in percent )

1969 198 0

USSR 100 100 . 0

Caucasus 14 10 . 1 Ural—Volga 16 18 . 7 Other European 50 52 . 9 Asian portion 20 18 . 3

Sources : 1969 data from Gankin et al ., 1972, p . 104 ; 1980 dat a from Table 3 .

Table 9

TRANSPORT OPPORTUNITY COSTS FOR SOVIET REFINERIES IN 198 0

(million ton—kilometers per ton of extra capacity )

Rank Refinery Opp . Cost Rank Refinery Opp . Cos t

1 L'vov 25 .9 21 Ukhta 9 . 3 2 Khabarovsk 25 .4 22 Krasnodar 9 . 1 3 Drogobych 25 .3 23 Saratov 9 . 1 4 Nadvornaya 24 .4 24 Tuapse 7 . 6 5 Mazeikiai 23 .2 25 Syzran' 6 . 7

6 Komsomol ' sk 22 .8 26 Perm' 6 . 3 7 Odessa 21 .3 27 Kuybyshev 5 . 4 8 Mozyr' 20 .8 28 Nizhnekamsk 5 . 3 9 Novopolotsk 20 .2 29 Groznyy 5 . 0 10 Kirishi 19 .6 30 Pavlodar 4 . 7

11 Kherson 19 .1 31 Orsk 4 . 4 12 Kremechug 17 .7 32 Batumi 3 . 0 13 Lisichansk 14 .4 33 Gur ' yev 2 . 3 14 Moscow 14 .3 34 Salavat 15 Yaroslavl' 14 .1 Ishimbay 1 . 7

16 Alty—Arik 13 .5 35 Ufa 1 . 7 17 Fergana 12 .8 36 Omsk 1 . 6 18 Ryazan' 12 .5 37 Baku 0 19 Volgograd 10 .4 38 Krasnovodsk 0 20 Gor'kiy 10 .2 39 Angarsk 0

8 1 Section IV . REFERENCE S

Biryukov, 1981 : V . Ye . Biryukov . Transport v odinnadstato y pyatiletke (Moscow : Znaniye, 1981) .

Biryukov et al ., 1982 : V . Ye . Biryukov et al . Ratsionalizatsiy a perevozok gruzov (Moscow : Znaniye, 1982) .

Danilov et al., 1983 : A . D . Danilov et al . Ekonomicheskay a geografiya SSSR (Moscow : Vysshaya shkola, 1983) .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . Th e Soviet Energy System : Resource Use and Policie s (Washington, D .C . : Winston and Sons, 1979) .

Dubinskiy, 1977 : V . G . Dubinskiy . Ekonomika razvitiya i razmeshcheniya nefteprovodnogo transporta v SSSR (Moscow : Nedra, 1977) .

Ekon . gazeta, November 1981 : "Neftepererabatyvayushchay a promyshlennost ' , " Ekonomicheskya gazeta, No . 46 (Novembe r 1981), pp . 1-2 .

Fedorov et al ., 1981 : N . A . Fedorov et al . "Osnovnyye printsip y gazosnabzheniye narodnogo khozyaystva," Gazovay a promyshlennost', No . 12 (1981), pp . 6-8 .

Gankin et al ., 1972 : M . Kh . Gankin et al . (eds .) . Perevozk i gruzov (tendensey razvitiya i puti ratsionalizatsiy ) (Moscow : Transport, 1972) .

Grigor'yev et al . A . N . Grigor'yev et al . "Optimizatsiy a perevozok nefteproduktov , " Zheleznodorozhniy transport , No . 2 (1984), pp . 60-64 .

Grigor'yev and Zorin (eds .) . A . N . Grigor'yev and V . M . Zori n (eds .) . Teploenergetika i teplotekhnika (Moscow : Energiya, 1980) .

8 2 Hunter and Kaple, 1983 : Holland Hunter and Deborah A . Kaple . Th e Soviet Railroad Situation (Washington, D .C . : Wharto n Econometrics Forecasting Associates, September 1983) .

Huzinec, 1978 : George Huzinec . " The Impact of Industria l Decision—Making upon the Soviet Urban Hierarchy, " Urba n Studies, Vol . 15, no . 2 (June 1978), pp . 139—148 .

JPRS, 1984 : Joint Publications Research Service . Soviet Union : Transportation, JPRS UTR—84—023, 7 August 1984, p . 3 2

Kazanskiy (ed .), 1980 : N . N . Kazanskiy (ed .) . Geografiya pute y soobshcheniya (Moscow : Transport, 1980) .

Khrushchev, 1969 : A . T . Khrushchev . Geografiya promyshlennost ' SSSR (Moscow : Mysl', 1969) .

Kurtzweg and Tretyakova, 1982 : Laurie Kurtzweg and Albin a Tretyakova . "Soviet Energy Consumption : Structure an d Future Prospects, " in U .S . Congress, Joint Economi c Committee . Soviet Economy in the 1980's : Problems an d Prospects (Washington, D .C . : U .S . Government Printin g Office, 1982), pp . 355-390 .

Levcik, 1981 : Friedrich Levcik . "Czechoslovakia : Economi c Performance in the Post—Reform Period and Prospects for th e 1980's," in U .S . Congress, Joint Economic Committee . East European Economic Assessment : Part I Country Studie s 1980 (Washington, D .C . : U .S . Government Printing Office , 1981), pp . 374-424 .

Lydolph, 1979 : Paul E . Lydolph . Geography of the USSR : Topica l Analysis (Elkhart Lake, Wis . : Misty Valley, 1979) .

Narkhoz SSSR 1980 : TsSU (Tsentral'noye statisticheskoy e upravleniye pri Sovete Ministrov SSSR) . Narodnoy e khozyaystvo SSSR v 1980 godu, statisticheskiy yezhegodni k (Moscow : Finansy i statistika, 1981) .

Nekrasov and Troitskiy, 1981 : A . M . Nekrasov and A . A . Troitskiy . Energetika SSSR v 1981—1985 godakh (Moscow : Energoizdat , 1981) .

8 3

"News Notes," SG— ... : Theodore Shabad . "News Notes," Sovie t Geography : Review and Translation : Vol . 10, no . 7 (September 1969), p . 42 3 Vol . 17, no . 10 (December 1976), p . 714 . Vol . 18, no . 9 (November 1977), p . 702 . Vol . 22, no . 4 (April 1981), p . 275 . Vol . 23, no . 4 (April 1982), pp . 282-283 . Vol . 25, no . 4 (April 1984), p . 268 .

Oil and Gas Journal, Vol . 25 : "Soviet Union's Refining Industr y Chalks Up Record Runs, Profits , " Oil and Gas Journal, Vol . 25 (January 2, 1984), pp . 25-28 .

Sagers, 1984 : Matthew J . Sagers . " Refinery Throughput in th e USSR . " Center for International Research, CIR Staff Paper , No . 2 (Washington, D .C . : U .S . Bureau of the Census, Ma y 1984) .

Sagers and Green, 1982 : Matthew J . Sagers and Milford B . Green . "Spatial Efficiency in Soviet Electrical Transmission, " Geographical Review, Vol . 72, no . 3 (July 1982), pp .291 — 303 .

Sagers and Green, 1984a : " Modeling the Transportation of Sovie t Natural Gas," Proceedings . Conference on Modeling an d Simulation (Pittsburgh, Pa . : 1984) .

Sagers and Green, 1984b : Matthew J . Sagers and Milford B . Green . "Transportation of Soviet Petroleum from Siberia . " Conference of the Midwest Slavic Association . (Columbus , Ohio : 1984) .

Shafirkin, 1978 : B . I . Shafirkin . Ekonomicheskiy spravochni k zheleznodorozhnika, chast II (Moscow : Transport, 1978) .

Sredin and Lastovkin, 1972 : V . V . Sredin and G . A . Lastovkin . "Ekonomicheskiye pokazateli kombinirovannoy ustanovk i LK—6U," Khimiya i tekhnologiya topliv i masel, No . 1 2 (1972), PP . 30-33 .

Thornton, 1983 : Judith Thornton . "Estimating Demand for Energ y in the Centrally Planned Economies, " in Robert G . Jense n et al . (eds .) . Soviet Natural Resources in the Worl d Economy (Chicago : University of Chicago Press, 1983) , pp . 296—305 .

Tretyakova, 1980 : Albina Tretyakova . "Calculation of Oi l Consumption Volume for 1972 ." Unpublished working paper . Center for International Research (Washington, D .C . : U .S . Bureau of the Census, 1980) .

8 4

Tretyakova, 1982 : Albina Tretyakova . " Politika kapital'nyk h volozheniy, svyazannykh s uglubleniyem pererabotki nefti v SSSR v 1981—1985 gg ." Unpublished working paper . Cente r for International Research (Washington, D .C . : U .S . Burea u of the Census, 1982) .

Tretyakova, 1984 : Albina Tretyakova . Expenditures on Fuels i n the USSR to 1990 . Foreign Economic Report, No . -- . (Washington, D .C . : U .S . Bureau of the Censu s [forthcoming]) .

UN, 1983 : United Nations, Statistical Office . 1981 Yearbook o f World Energy Statistics (New York : United Nations, 1983) .

Vlasov, 1984 : A . V . Vlasov . "Bor'ba s poteryami nefteprodukto v pri transportirovanii i khranenii," Transport i khraneniy e nefteproduktov i ublevodorodnogo syr'ya (1984).

WEFA, 1983 : Wharton Econometrics Forecasting Associates, Inc . Data Bank, 1983 .

8 5 V . COAL MOVEMENTS IN THE USS R

A . Introductio n

Coal long has been an important energy source in the USSR .

Until the upsurge of the hydrocarbons in the 1950's, wit h petroleum supplanting coal as the USSR's principal energy source , coal played the principal role in Soviet energy supply, accountin g for over 60% of all fuel produced [Narkhoz SSSR 1922-1972, p .

162] . However, by 1980, coal accounted for only about 25% o f

Soviet production of primary energy [Narkhoz SSSR 1980, p . 156] .

Although its relative contribution has declined because of th e enormous increase in the production of petroleum and natural gas , the production of coal has increased in absolute terms, from 509 . 6 million tons of raw coal in 1960 to 716 .4 million tons in 1980, o r in calorific equivalents, from 373 .1 million tons of standard fue l in 1960 to 484 .4 million tons in 1980 [Narkhoz 1980, pp . 156-157] .

As the deteriorating situation for petroleum became evident i n the mid-1970's, initially energy policy favored accelerate d development of coal because of the country's huge coal reserve s

[Gustafson, 1982 ; Dienes and Shabad, 1979, p . 103] . However , severe problems in the coal industry led to an unprecedente d decline in production in the late 1970's, stemming largely from

8 6 the lag in development of new mine capacity to replace min e depletions ["News Notes," SR—April 1982, pp . 287—290] . This force d a change in strategy to gas [Gustafson, 1982] . The eclipse of th e coal strategy was due to a combination of factors, the mos t important probably being the history of underinvestment in th e industry and its resulting poor technological modernization [OTA ,

1981 ; CIA, 1980 ; Gustafson, 1982] . These conditions made it nex t to impossible for a substantial increase in output to be achieve d in less than a decade because of the long lead times required t o bring new mine capacity on line [CIA, 1980] . Other consideration s included the relatively high cost of the new mine capacity as wel l as the fairly limited potential for substituting coal for oi l

[CIA, 1980] .

There is also a geographical element in the demise of the coa l strategy . The accessible coal reserves of the European USS R

(principally in the Ukraine's Donets Basin) have been seriousl y depleted, while most of the USSR's huge reserves are located i n the east . Therefore coal production has been shifting eastward , although the eastern reserves are generally of lower quality , expensive and difficult to develop, and require considerabl e transport to get the energy to the main sources of demand in th e

Euroean USSR . As a result, east—west shipments of coal have bee n steadily rising, from 66 million tons in 1970 to 96 million i n

1975 . By 1980, they were around 120 million tons ["News Notes, "

SG—December 1982, pp . 769-770] . Of this, the amount shipped t o

8 7 the regions west of the Urals was planned to increase from 31 . 3 million tons in 1975 to about 46 million tons in 198 0

[Mintrofanov, 1977, p . 83] .

It is principally the railroads which have the burden o f transporting coal in the USSR . Coal loadings on railroads in 198 0 were 731 .6 million tons, while river and sea shipments were onl y

23 .8 and 9 .6 million tons, respectively [Narkhoz SSSR 1980, pp .

296, 299, 302] . Coal is the single most important commodity i n generating rail freight traffic, in 1980 accounting for 17 .4% o f the Soviet railroads' total ton-kilometers and 20% of the ton s originated [Narkhoz SSSR 1980, p . 295] .

Therefore the growing volume of long-distance coal hauls fro m the eastern basins, necessitated by stagating or declinin g production in the Donets Basin and other western coal-producin g areas, is placing an increasing burden on an already overloade d rail system [Hunter and Kaple, 1983] . Reflecting this fact, th e average length of coal hauls by rail increased from 692 kilometer s in 1970 to 695 kilometers in 1975, and then jumped to 81 8 kilometers in 1980 [ " News Notes," SG-December 1982, p . 771] .

This section of the report examines aspects of the problem o f transporting coal in the USSR . Since the production and distribution of coking coal for 1980 are analyzed in considerable dept h by Osleeb and ZumBrunnen [1984], the focus here is upon movement s of non-coking coal . This is mostly steam ( " energeticheskiy") coa l for boiler-furnace use, although some is used for technologica l

88 purposes . Most of steam coal is used centrally for generatin g

electrical power, although 239 million tons of raw coal wer e

apparently utilized by other industrial users (including smal l

electrical stations not operated by the Ministry of Electrica l

Power) and the household—communal sector in 1980 . *

Included within the 239 million tons of apparent consumptio n

are the considerable losses involved in beneficiating, othe r

processing, transporting, and storing coal . Because availabl e

production data by basin are in gross output and losses occu r mostly for coking coal (see below), initially losses are no t considered in our transportation model .

However, the difference between gross mine output an d marketable (net) output alone is significant . This mostly affect s hard coal, as these losses largely result from beneficiation .

Gross mine output of hard coal in 1980 was 553 million tons ["New s

Notes," SG—April 1982, p . 288], while net (marketable) output wa s only 493 million tons [SEV, 1981, p . 81], a difference of 6 0 million tons . In contrast, the difference for lignite is muc h less because it is generally not beneficiated . Gross mine outpu t

* This amount for non—electrical station consumption of stea m coal is calculated as gross mine output (716 million tons : Narkhoz SSSR 1980, p . 157), less coking coal production (17 8 million tons : CIA, 1982, p . 205), less deliveries to centra l electrical power stations (299 million tons : Nekrasov an d Troitskiy, 1981, p . 225) .

8 9 of lignite in 1980 was 163 million tons, with a net output of 16 0 million tons [ " News Notes, " SG—April 1984, p . 288 ; SEV, 1981, p .

891] . Since almost all of coking coal is beneficiated, but onl y

20% of non—coking coal is [Tretyakova, 1984], most of the losse s for hard coal are actually restricted to coking coal . For exampl e in 1975,, 68% of the difference between gross and net output o f hard coal as a whole was accounted for by coking coal losses [SEV ,

1976, p . 77 ; Dienes and Shabad, 1979, p . 104] .

Another major source of losses is transportation . Ope n railroad cars often lose a ton per car for every thousan d kilometers travelled [OTA, 1981, pp . 97-98] . In 1975, transportation losses for Coal Ministry shipments were 35 .6 millio n tons, about 5% of its production [Dubinskiy, 1977, p . 27] .

Although only limited information is available on regiona l coal production and consumption levels and transport capacity, th e

Soviet coal distribution system of 1980 is modeled as a capacitated network . This network consists of supply nodes (coa l fields), demand nodes (coal—fired power stations and larg e cities), and bounded arcs (railroad lines and some shippin g routes) (Figure 8) . A network allocation model, the out—of—kilte r algorithim, is then applied to generate optimal hypothetical flow s for the system, allowing the general pattern of non—coking coa l movements and mine and railroad utilization to be ascertained an d evaluated .

9 0 Supply nodes in the network are the Soviet coal fields o r

coal-producing areas . A total of 31 supply nodes are utilized .

Five are used to represent the main areas of the Donets Basi n

(Donetsk, Novoshakhtinsk, Voroshilovgrad, Gukovo and Pavlograd) ,

with two nodes each for the Kuznets Basin (Mezhdurechensk an d

Kiselevsk), Kansk-Achinsk Basin (Irsha-Borodino and Nazarovo) an d

Pechora Basin (Vorkuta and Inta) (Table 10) . The suppl y

availability at each is determined by the basin's annual output o f

raw coal less coking coal production .

Coking coal production for 1980 in each basin is taken fro m

the estimates given by the CIA [1982, p . 205) . Coking coa l

production in the Donets Basin (74 million tons) is assumed t o

occur mostly at the Donetsk and Voroshilovgrad nodes (32 millio n

tons each), with the remainder at Gukovo . All coking coal in th e

Pechora Basin (18 million tons) is assumed to be produced a t

Vorkuta, and in the Kuznets Basin, most of the coking coal i s

assumed to originate at the Mezhdurechensk node (48 to 55 millio n

tons) . Twenty million tons of coal are produced at a number o f unknown smaller fields . This amount is allocated to a dummy nod e at Mezhdurechensk as it is near the center of the network .

Removing coking coal from the analysis eliminates one of th e most serious problems for the model, that of qualitativ e differences in the coal . The problem still exists, as the coal o f the various basins remains heterogeneous, but coking coal is th e highest quality coal and in extremely short supply in the USS R

9 1 [CIA, 1982 ; Izvestiya, 6 July 1984] . Its use in the metallurgica l

industries, particularly ferrous metallurgy, also sets is apart .

In contrast, steam or " energeticheskiy " coal is used basically a s a boiler fuel for generating heat and electricity .

The remaining qualitative differences among the various coal s should not pose too great a problem for the model . The low— quality coals (e .g ., Moscow and Kansk—Achinsk lignites) are no t very transportable and so mostly are used at nearby electrica l power stations . Since the model allocates available supply to th e nearest demand nodes, it should match the lignite with the nearb y stations .

Two exceptions to this are the Ekibastuz and Angren coals .

The subbituminous coal from Ekibastuz in northern Kazakhstan i s being hauled on an increasing scale to electrical stations in th e

Urals, a distance of over 1400 kilometers . In 1980, Ural s electrical stations used 33 million tons of Ekibastuz coal, an d since 1978, the Cherepe t ' station in Tula Oblast near Moscow als o has been using Ekibastuz coal [Nekrasov and Troitskiy, 1981, p .

228], a distance of about 3000 kilometers . The Cherepet' statio n had been using local lignite from the Moscow Basin, but reserv e exhaustion in the Moscow Basin forced it to begin using Karagand a coal in 1976 and then Ekibastuz coal in 1978 ["News Notes," SG —

December 1982, p . 772] .

Declining output in the Moscow Basin also seems to be th e reason for the shipment of Angren lignite from Central Asia t o

92 help fuel the 1200 MW of coal-fired capacity at the Ryazan '

station ("News Notes," SG-December 1982, p . 772 ; March 1982, p .

197), a distance of about 3300 kilometers . The Angren shipment s

are expected to cease once a new station under construction in th e

Angren Basin itself goes into operation in 1984 [Biryukov et al .,

1982, p . 33] .

Anthracite coal is also qualitatively different from othe r

steam coals . Almost all of the USSR's anthracite (about 7 5

million tons annually) is produced in the Donets Basin, in Rosto v

Oblast around Novoshakhtinsk and in neighboring Voroshilovgra d

Oblast in the Ukraine . Much of the anthracite is used to fue l

local electrical stations, although a considerable amount is use d

as a boiler fuel at a number of industrial enterprises throughou t

the country (e .g ., Donets anthracite is used as far away as th e

Kuznets Basin ; see Biryukov et al . [1982, p . 33]), as well as fo r

heating in the household-communal sector [Tretyakova, 1980] .

Demand nodes in the system consist of major coal-fire d

electrical stations and the USSR's large cities . A total of 5 5 electrical stations are included as demand nodes in the study .

Total coal consumption by central electrical power stations i n

1980 was 299 .3 million tons, supplied from several differen t basins (Table 11) . Coal consumption for each of the 55 station s generally is determined by allocating the amount for each basin o r region among the appropriate stations according to installe d capacity . However, only half of the capacity of station s

9 3 utilizing coal part of the year (dual—fired stations) is used i n determining the allocation . This allocation results in a regiona l distribution conforming closely to estimates based upon th e percentage data given in Nekrasov and Troitskiy [1981, p . 232] , once converted to standard fuel equivalents .

Deliveries of Ekibastuz coal to central electrical stations i n

1980 were 62 .4 million tons (Table 11) . Of this, 53 .4% (about 3 3 million tons) went to stations in the Urals [Nekrasov an d

Troitskiy, 1981, p . 228], and perhaps 5 million tons went t o nearby West Siberian stations, with maybe a million tons bein g shipped to the Cherepet' station in Tula Oblast (see below) . Th e remainder (23 million tons) represents consumption withi n

Kazakhstan . In 1979, 32 million tons of Ekibastuz coal went t o the Urals and 3 million tons to West Siberia, with 22 million ton s remaining in Kazakhstan ["News Notes," SG—March 1980, p . 189] .

Shipments to Cherepet' in 1979 are not mentioned, although the y began in 1978, so usage must be fairly small .

The stations in the Urals using Ekibastuz coal are known t o include Reftinsk, Troitsk, and the Kurgan TETs (heat and powe r stations), as well as Verkhne—Tagil and Serov [Nekrasov an d

Troitskiy, 1981, p . 228 ; Dubinskiy, 1977, p . 36], so 33 millio n tons are allocated among them . The West Siberian station s receiving Ekibastuz coal evidently include TETs at Omsk an d

Barnaul, and 5 million tons are allocated between them . Th e stations in Kazakhstan fueled by Ekibastuz coal are Ekibastuz ,

94 Yermak, Karaganda, and TETs at Pavlodar and Petropavlovsk [ " New s

Notes," SG-March 1980, p . 188] . Only half of Karaganda's capacit y

is considered in the allocation since it also uses Karaganda coal .

The allocation of 23 million tons among them results in the 100 0

MW Ekibastuz station (its capacity in 1980) receiving a littl e

over 4 million tons, more or less the 4 million tons per 1000 M W

as planned [Dienes and Shabad, 1979, p . 117] .

In 1980, 23 .3 million tons of Kansk-Achinsk coal wer e

delivered to central electrical power stations (Table 11) . Thi s

would be to the station at Nazarovo and the Krasnoyarsk complex o f

thermal stations, and is allocated accordingly . Apparently, som e

of this amount is used by West Siberian stations, such as th e

Novosibirsk TETs [Dubinskiy, 1977, p . 230] .

Deliveries of Kuznets coal to electrical power stations i n

1980 included 39 .7 million tons mined in open pits, plus about 3 5

million tons of deep-mined coal (Table 11) . Twelve million ton s

of Kuznets coal were shipped to the European USSR [Nekrasov an d

Troitskiy, 1981, p . 228], leaving about 63 million tons for use i n

the Urals and West Siberia . This amount is allocated among th e

Verkhne-Tagil, Yuzhnoural'sk, Tom-Usa, Belova, and South Kuzba s stations, and the Novosibirsk and Kemerovo TETs . Since th e

Yuzhnoural'sk station probably also uses local Urals coal and th e

Verkhne-Tagil station also uses Ekibastuz coal, gas, and oil, onl y half of their capacity is utilized in determining the allocatio n

95 (see below) . This allocation provides 16 million tons of Kuznet s coal to Urals electrical stations .

At the Karaganda Basin, total production was about 49 millio n tons in 1980, of which 27 million tons was coking coal [CIA, 1982 , p . 205] . Apparently 12 million tons were delivered to centra l electrical stations (Table 11), of which perhaps 6 million ton s went to the European USSR (see below), leaving 6 million tons fo r consumption by the stations at Karaganda itself .

Lignite deliveries from the Moscow Basin in 1980 were 21 . 8 million tons (Table 11) . The major stations which hav e traditionally used Moscow coal are Kashira, Ryazan', Shchekino ,

Novomoskovsk, and Cherepet' . But in the of the 1970's reserv e exhaustion in the Moscow Basin led to declining production . As a result, Kuznets coal was supplying much of the needs of th e

Kashira and Cherepe t ' stations, as well as the Moscow TETs in 197 5

[Dubinskiy, 1977, p . 33] . Cherepet' was forced to switch t o

Karaganda and Ekibastuz coal after 1976, and evidently about 3 million tons of Angren lignite were used at Ryazan' in 1980 ,

96 supplying about half of its needs .* Therefore the 21 .8 millio n tons delivered from the Moscow basin are allocated among thes e stations utilizing only half of Ryazan's coal—fired capacity an d excluding Cherepet '.

Coal deliveries from the L'vov-Volyn Basin to power station s were 7 .3 million tons in 1980 (Table 11) . Only two stations ,

Dobrotvor and Burshtyn, are supplied from this source [Danilov e t al ., 1983, p . 383] . Since the 2400 MW Burshtyn station also burn s oil, only half of this capacity is used in determining th e allocation .

Deliveries of coal from the Urals' Kizel and Chelyabins k

Basins in 1980 were 12 .2 million tons (Table 11) . This i s allocated among the stations at Yuzhnoural'sk, Serov (utilizin g only half their installed capacity since they were also considere d in the allocation of Kuznets coal), Yayva, and TETs a t

Chelyabinsk, Sverdlovsk, and Sterlitamak .

* The amount of coal utilized from the Moscow Basin in 1970 , 1975, and 1980, when compared with the aggregate capacity of th e main stations it supplied indicates that 4—5 million tons o f lignite are needed for each 1000 MW of capacity . Thus there is a shortage of about 3 million tons in 1980, which is assumed t o represent the shipments of Angren coal to Ryazan' . This shipmen t still leaves 2—3 million tons of coal production at Angren stil l available to fuel the existing 600 MW Angren station in Centra l Asia . Consumption of Angren coal is planned to be 4 .6 millio n tons in 1985 with the startup of the new Angren station of 1200 M W now under construction [Nekrasov and Troitskiy, 1981, p . 235 ; Biryukov et al ., 1982, p . 33] .

9 7 Deliveries to central power stations from the coal fields i n the Far East and East Siberia evidently were around 11 millio n tons in 1980 (Table 11), out of a total gross production of ove r

43 million tons ["News Notes," SG—April 1982, p . 288] . Thus 1 1 million tons are allocated among the Raychikhinsk, Primorsk ,

Artem, Vladivostok, Partizansk, Irkutsk, Gusinoozersk, Chita, an d

Ulan—Ude stations .

Coal consumption for the electrical stations in the Europea n

USSR is somewhat difficult to determine because coal is used fro m such a variety of basins . Their total coal consumption in 198 0 was equivalent to 64 .2 million tons of standard fuel, 33 .9 millio n tons of which was in the Ukraine [Nekrasov and Troitskiy, 1981, p .

228] .

Donets coal deliveries were 59 .7 million tons (Table 11) , equal to approximately 37 .1 million tons of standard fuel with th e degredation of quality in recent years [Nekrasov and Troitskiy ,

1981, p . 224] . Twelve million tons of Kuznets coal were utilize d in the European USSR west of the Urals (about 9 .1 million tons o f standard fuel), as well as 7 .3 million tons of L'vov—Volyn coa l

(about 4 .5 million tons of standard fuel) and 21 .8 million tons o f

Moscow coal (about 6 .2 million tons of standard fuel) . Apparentl y about 3 million tons of Angren coal, 1 million tons of Ekibastu z coal, 6 million tons of Karaganda coal, and only about 1 millio n tons of Pechora coal were used by European central electrica l stations . These amounts convert to about 7 .2 million tons o f

9 8 standard fuel, which with the deliveries of Donets, Kuznets ,

L'vov—Volyn, and Moscow coal, sum to the 64 .2 million tons o f standard fuel consumed .

Declining deliveries of Donets coal and its lower quality hav e led to increasing shipments of Kuznets, Karanganda and Int a

(Pechora) coals to stations in the Ukraine [Nekrasov an d

Troitskiy, 1981, p . 228] . At the same time, shipments of Donet s coal northward continue, to supply TETs in the Moscow—Yaroslavl ' area, counter to the flow of Kuznets coal [Nekrasov and Troitskiy ,

1981, p . 229] .

The allocation of Moscow, Ekibastuz, L'vov-Volyn, and Angre n coal among the European stations was done previously (see above) .

Therefore the deliveries of these coals (33 million tons) was subtracted from the European total, leaving 78 million tons . Thi s amount is allocated among the remaining coal-fired stations in th e

European USSR according to installed capacity . The stations included are Moldavia, Pridneprovsk, Cherepet' (for Karaganda coal) ,

Kurakhova, Gottwald (Zmiyev), Starobeshchevo, Novocherkassk ,

Tripol ' ye, Voroshilovgrad, Ladyzhin, Uglegorsk, Zaporozh'ye ,

Krivoy Rog, Mironovskiy, Slavyansk, and TETs at Moscow and Kiev .

The remainder of apparent domestic coal consumption, 23 9 million tons, is used to fuel boilers and furnaces at a variety o f industrial enterprises and the household—communal sector .

Although it also includes losses, this amount is allocated amon g large Soviet cities according to population size . City size i s

99 used as it is known to reflect the relative industrial importanc e of the city as well as the size of its housing and communa l economy [Huzinec, 1978], the two largest consumers of coa l

[Kurtzweg and Tretyakova, 1983] .

A total of 147 cities are included, comprising almost al l oblast centers and those cities with over 100,000 inhabitants . An exception to this is the cities of the Caucasus, Baltic, an d

Central Asia . Since coal plays a relatively minor part i n supplying the industrial, municipal, and household heating need s of these regions [see Gankin et al ., 1972, p . 78], only th e republic capitals are considered in making the allocation . Th e city allocations are aggregated by region in Table 12 .

No data are available to determine the actual overall total o r the actual regional distribution of this consumption . However, i n

1975, the Coal Ministry delivered 81 .7% of its gross production t o consumers (567 .3 our of 694 .6 million tons) [Dubinskiy, 1977, p .

14] . Of this, 271 .5 million tons were delivered to centra l electrical stations and 125 .4 million tons to enterprises of th e ferrous metallurgy industry [Dubinskiy, 1977, p . 35] . Th e residual, 170 .4 million tons, would be deliveries to othe r industrial users and the household—communal sector . If a simila r proportion for deliveries is assumed from 1980's gross output o f coal, and assuming that all coking coal is used in th e metallurgical industries, only 108 million tons remains fo r deliveries to these other users after subtracting deliveries t o

1 00 electrical power stations . This is less than half of apparen t

deliveries (239 million tons) derived as a residual . Data on al l

shipments from the Coal Ministry to the various regions in 197 0

and 1975 are given in Table 13 for comparison .

In addition to these supply and demand nodes, over 100 inter —

mediate nodes are added to the network to allow for junctions an d

proper geographic alignment in the transportation system . All th e

intermediate nodes are cities or towns .

Bounded arcs represent the rail lines and shipping routes i n

the system . The alignment of the rail lines is taken from severa l

Soviet maps and atlases showing the railroad network . Arc s

representing shipping routes are added to the system for citie s not served by rail, such as between Magadan and Vladivostok an d

Petropavlovsk—Kamchatskiy and Vladivostok . No data are availabl e

to determine annual transmission capacities for the arcs so th e model is allowed to determine the optimal flows practicall y unhindered by capacity constraints . A limit of 70 million tons i s set as the upper bound initially (i .e ., maximum transmissio n capacity) for all arcs, as this exceeds the output of any singl e supply node . Only a few arcs, such as Ekibastuz—Tselinograd, ar e required to transmit more than this in order to achieve a feasibl e solution .

Distance is used as a surrogate for transportation cost in th e model . Distances are calculated from the latitude and longitud e of the terminal nodes for each arc, making the length of an ar c

1 0 1 the cost of utilizing it . There is a close correlation betwee n such costs and distance in the USSR, although the actual railroa d freight rate structure is more complicated than such a simpl e linear relationship [Shafirkin, 1978] .

An exception to this is the arc connecting the Ekibastuz coa l field with the Ekibastuz electrical station . This arc is mad e

2000 kilometers long to simulate the lower transportability of th e subbituminous coal at Ekibastuz in comparison with the highe r quality coal of the Kuznets Basin . The lower quality of Ekibastu z coal largely restricts its use to only as far west as the Urals , whereas Kuznets coal has a wide market area in the European USSR .

But because the Ekibastuz Basin is located at an intermediat e point between the European USSR and the Kuznets Basin, the mode l is likely to utilize coal from the closer basin at Ekibastuz fo r

European consumption and supply the Urals with Kuznets coal . Th e

2000 kilometer penalty should prevent this from occurring .

B . Model Result s

The modeled coal flows are shown in Figure 8 . The pattern i s dominated by the large flows from the eastern basins to the west .

The largest flows in the system are in Kazakhstan, betwee n

Ekibastuz and Tselinograd and from Tselinograd to Kokchetav (9 0 million tons each) . This is due to the large flow to the Ural s from the Ekibastuz Basin being joined by a smaller flow of Kuznet s

1 0 2 coal coming through Barnaul . Then at Tselinograd, this flow i s

joined by coal moving north from Karaganda . These large flows o f

90 million tons annually translate into about 4500 carloads pe r

day [see Dienes and Shabad, 1979, p . 117], obviously strainin g

railroad facilities to the limit . In actuality, only about 300 0

carloads per day leave Ekibastuz ["News Notes, SG-April 1984, p .

282], and only 80% of this can be accomodated by the Sout h

Siberian line through Tselinograd [Kontorovich, 1982, p . 55] .

This would translate-into 2600-2700 carloads of Ekibastuz coal pe r

day through Tselinograd, as the route also must accomodate som e

shipments of coal from the Kuzbas [Kontorovich, 1982, p . vi] .

Thus the model shows that optimally, more coal should be shippe d

through there, and it demonstrates that considerable congestio n exists on the South Siberian line through Ekibastuz .

Another major flow of 70 million tons is generated from th e

Kuzbas along the Trans-Siberian and Central Siberian lines to th e

Urals (Figure 8) . This massive flow of coal westward must also b e straining existing railroad facilities, especially considering th e need to also move coking coal from the Kuzbas (Table 14) .

Interestingly, the Kuzbas flow initially follows the Centra l

Siberian route through Barnaul to Omsk, rather than the Trans -

Siberian through Novosibirsk . While this is not entirely correct , as currently most of the flow is along the Trans-Siberian line, i t does support the proposals for turning the Central Siberian into a

1 0 3 specialized line for coal shipments [Kontorovich, 1982, pp . xv, ,

114-115 ; "News Notes," SG-April 1984, p . 280] .

The model generates flows of eastern coal through the Urals t o the European USSR, into the Ukraine, central Russia, the Baltic , and Belorussia . Almost all of the European USSR is shown as bein g supplied with eastern coal, the exceptions being areas in th e

Ukraine in the immediate vicinity of the Donets, Dnieper, an d

L'vov-Volyn Basins, and in the Northwest where coal supplies are , obtained from the Pechora Basin . These modeled flows demonstrat e the widening supply area of eastern coal as European coa l production declines or stagnates [see Mitrofanov, 1977] .

Flows of coal are also generated from Karaganda and along th e

Turk-Sib line from the Kuzbas to southern Kazakhstan, whil e

Central Asian coal is shipped north considerable distances t o

Aktyubinsk and Uralsk in northern Kazakhstan and through Astrakha n to the European USSR . Some Central Asian coal is also shown a s being shipped through Krasnovodsk across the Caspian to supply th e

Caucasus, although Donets coal has traditionally supplied th e

Caucasus [Danilov et al ., 1983, p . 428] . In contrast, Urals an d

Georgian coal is limited to local use .

The model generates a small flow of coal from the Far Eas t over the Trans-Siberian line to East Siberia, and then a large r flow from East Siberia to the Kuzbas in West Siberia . Thi s

"frees" more of Kuzbas production for shipment west . Shipments o f coal from the Far East to East Siberia are apparently incorrec t

[see Rogers, 1983, p . 196] . In 1975, coal production in the Fa r

1 0 4 East was about 35 million tone [Dienes and Shabad, 1979, p . 111] ,

and deliveries to the region were 36 million tons (Table 13) ,

implying that regional exports are nil . However, East Siberia n

coal is known to be imported into West Siberia [Kontorovich, 1982 ,

p . xi ; Lydolph, 1979, p . 285 ; Kazanskiy, 1980, p . 38], althoug h

Kuznets coking coal is shipped in the reverse direction to the Fa r

East for export . About 70 million tons of coal were produced i n

East Siberia in 1980, but only 80% was consumed within the regio n

[Danilov et al ., 1983, p . 336] . Presumably, the remainder (abou t

14 million tons) is sent to West Siberia . For example, part o f

the needs of the Novosibirsk TETs is met with Kansk—Achinsk coa l

[Dubinskiy, 1977, p . 23] .

In general, the model evidently replicates the broa d

dimensions of Soviet coal movements and general supply pattern s

[Lydolph, 1979, pp . 285, 429 ; Kazanskiy, 1980, pp . 36—40] ,

although there are some discrepancies (e .g ., the Far East ,

Caucasus) . In particular, the model correctly shows the massiv e

flow of coal from the eastern basins to the European USSR, righ t

into the Donets Basin itself . Interestingly, Angren lignite fro m

Central Asia is shown as travelling considerable distances , although not as far as Ryazan', where some of it is actuall y shipped .

However, the overall magnitude of the model—generated flows i s too high . The model generates 795 .2 billion ton—kilometers , whereas in actuality, only 598 .8 billion ton—kilometers wer e incurred on Soviet railroads in 1980 [Narkhoz SSSR 1980, p . 295] ,

1 05 and this also includes movements of coking coal . The mino r amounts of river and sea shipments cannot explain the discrepancy .

The higher volume of traffic in the model may result fro m overestimating coal consumption because losses are not taken int o account . Thus more raw coal may be being shipped in the mode l than is actually the case . For example, the model generates a flow of 137 .5 million tons of coal to the European USSR althoug h unpublished data indicate the flow is only around 120 millio n tons, and this includes shipments of coking coal .

A very rough estimate of railroad freight traffic for coking coal would be 146 billion ton—kilometers ; i .e ., coal's averag e length of haul (818 kilometers) multiplied by production (17 8 million tons) . Thus steam coal freight on railroads may generat e approximately 453 billion ton—kilometers in 1980, which with se a and river movements would sum to around 473 billion ton — kilometers .

This level of freight turnover (474 .2 billion ton—kilometers ) is generated in a model simulation with the overall level o f demand reduced by 30%, from 538 million tons to 377 million tons .

This would indicate that losses of steam coal (the differenc e between gross production and actual deliveries) was around 16 1 million tons in 1980, or about 30%, a significant amount .* Sinc e

* Tretyakova [1980] calculated that in 1972 losses durin g processing came to about 28%, but deliveries to consumers wer e much higher than gross output minus losses, implying the greate r use of coal by—products in the national economy .

1 06 deliveries to central electrical stations were 299 million ton s

(Table 11), this means that deliveries to other users would b e only 78 million tons or so, or about 14% of the gross output o f non—coking coal .* This appears far too low .

Deliveries are underestimated in this second simulatio n because it generates an average length of haul of 1258 kilometers .

Although this is shorter than in the first simulation (147 8 kilometers), it is still 54% greater than the actual distance (81 8 kilometers) . Therefore, in addition to the effect of losses, th e model is generating too much traffic because the coal is bein g shipped too far . This must be the result of inaccuracies in estimating the distribution of steam coal consumption, largely by th e other users . This implies that the consumption of steam coal b y industrial, municipal, and household boilers does not reflect th e sector's general spatial distribution, but is more concentrated i n the coal—producing areas . Thus the fuel needs of these user s located elsewhere are met mostly with alternate, more trans — portable fuels .

* In 1972, these other users accounted for about 19% of coa l consumption [Kurtzweg and Tretyakova, 1982, p . 365] .

1 0 7 Flows for this second simulation are shown in Figure 9 . Th e largest flow, 62 .6 million tons, is from Tselinograd to Kokchetay .

The flow from Ekibastuz to Tselinograd is 56 .2 million tons, o r about 2800 carloads per day, closely approximating the actua l amount (see above) . The flow of Kuznets coal westward is 4 9 million tons . Thus the model generates an east-west flow of 9 6 million tons of steam coal, only 20 million tons more than th e estimated amount (Table 14) .

The capacity of only a single supply node, Ekibastuz, neede d to be increased to obtain a feasible solution in the first simulation (i .e ., that using 100% of apparent consumption) . Supply a t

Ekibastuz had to be increased to 85 million tons, although production in 1980 was only 67 million tons (Table 10) . Thi s adjustment implies that further expansion is needed at Ekibastu z and also serves to justify its rapid development in the las t decade . In the second simulation with only 70% of apparen t consumption, 59 .5 million tons of Ekibastuz coal were utilized, a n amount close to actual deliveries (62 .4 million tons) .

The model also generates a set of opportunity costs for the supply nodes, indicating how much transport cost could b e decreased per ton of extra capacity . Not surprisingly, the node s with the highest opportunity costs (around 8 .5 million ton - kilometers each) are all in the European USSR . These include th e

Dnieper Basin, Donets Basin (Pavlograd), and L ' vov-Volyn Basin , with somewhat lower opportunity costs (around 8 million ton -

1 08 kilometers) for the other Donets nodes (Gukovo, Donetsk ,

Voroshilovgrad, Novoshakhtinsk) and the Moscow Basin . Since th e average cost for transporting coal is about 1980 rubles pe r thousand ton—kilometers [Shafirkin, 1978, pp . 222-223], thes e savings translate into about 1 .6 million rubles annually for ever y extra ton produced in these basins . This illustrates why the Coa l

Ministry has attempted to maintain production in the Donets Basi n despite increasingly unfavorable mining conditions and high cost s

[Tretyakova, 1984] . In contrast, the lowest opportunity costs ar e in the Far East and East Siberia, reflecting their isolation fro m the main consuming centers .

C . Conclusion s

The modeled flows seem to be a generally accurate simulatio n of actual patterns of flows, after taking into account losses , coal heterogeneity, etc . This would imply that the distributio n of coal is fairly efficient in the USSR .

The massive flows of coal from the east are of magnitudes tha t must be straining railroad facilities to the limit . Although th e model indicates further expansion at Ekibastuz appears warranted , any further expansion will require more transport capacity . A shortage of rail cars was already constraining output at Ekibastu z in 1980 [Nekrasov and Troitskiy, 1981, p . 228] . Because th e railroad cannot handle any additional freight, it is planned fo r

1 09 further increments in mined coal to be consumed at larg e

electrical power stations at Ekibastuz, with electricity bein g

transmitted to consumers in the Urals and central Russia ove r

long—distance, extra-high—voltage lines [Nekrasov and Troitskiy ,

1981 ; "News Notes, " SG—April 1984, p . 282 ; March 1980, pp . 187 —

190] ; i .e ., " coal by wire . " The first Ekibastuz station reache d

an installed capacity of 3500 MW in 1983 and its eighth 500 M W

unit is scheduled for installation in 1984, while work on th e

second Ekibastuz station is underway . The extra—high—voltag e

lines designed to carry the electricity from Ekibastuz are unde r construction, with one line reaching as far as Kokchetav ["New s

Notes," SG—April 1984, pp . 290-291] .

Despite its considerable potential for expansion, output i n the Kuznets Basin actually declined in the late 1970's and ha s been stagnant in the early 1980 ' s, partly because of the strai n expansion would place on the railroads . As a result, the Coa l

Ministry has attempted to maintain production in the Donets Basi n despite increasingly unfavorable mining conditions . However, th e continuing stagnation of output in the Donbas has led som e planners to advocate redirecting investment to the Kuzbas .

Alternative transport modes have been proposed to handle th e increased freight traffic which would result from such a strategy , such as a long—distance coal—slurry pipeline [Campbell, 1982 ; OTA ,

1981, pp . 98—99], as well as various improvements to the rai l system, such as the reconstruction of the Central Siberian lin e

1 1 0 into a specialized coal carrier [CIA, 1980 ;"News Notes," SG—Apri l

1984, p . 280 ; Kontorovich, 1982] .

Development plans for the Kansk—Achinsk Basin are also for a coal—by—wire approach as at Ekibastuz . However, because it i s even further from the sources of demand, its development is bein g given a lower priority ["News Notes," SG—March 1983, pp . 249—256] .

The first mine—mouth station in the basin, Berezovskoye, projecte d to eventually reach 6400 MW, is running behind schedule . Th e first 800 MW unit was originally scheduled to become operationa l in 1984, but will probably not get going until 1985 ["News Notes, "

SG—April 1984, p . 291] .

The results from the model both explain and generally justif y these plans for the coal and electrical sectors .

1 1 1 Figure 8 . Modeled Coal Flows for 198 0

112 Figure 9 . Coal Flows at 70 Percent of Deman d

113

Table 1 0

COAL SUPPLY NODES IN 198 0 (without coking coal)

Amoun t Basin Town (million tons )

Donets Donetsk 6 2 Donets Novoshakhtinsk 20 Donets Voroshilovgrad 3 6 Donets Gukovo 1 Donets Pavlograd 1 1

Moscow Novomoskovsk 25 Pechora Vorkuta 1 Pechora Inta 9 Urals Kizel 3 Urals Kopeysk 2 0

Urals Volchansk 7 Kuznetsk Mezhdurechensk 2 4 Kuznetsk Kiselevsk 65 Kansk—Achinsk Irsha—Borodino 1 9 Kansk—Achinsk Nazarovo 1 5

So . Yakutia Neryungri 3 Karaganda Karaganda 2 2 Ekibastuz Ekibastuz 6 7 Uzbek Angren 6 Kirgiz Kyzyl—Kiya 4

Georgia Tkvarcheli 0 L'vov—Volyn Chervonograd 1 5 Dnieper Aleksandriya 1 0 Cheremkhovo Cheremkhovo 1 2 Azey Azey 1 2

Gusinoozersk Gusinoozersk 2 Raychikhinsk Raychikhinsk 1 5 Luchegorsk Luchegorsk 1 3 Artem Artem 5 Chita Chita 8 Ussuriysk Ussuriysk 6 Other (Mezhdurechensk) 2 0

TOTAL 53 8

114

Table 10--Continue d

COAL SUPPLY NODES IN 198 0

Sources : "News Notes, " Soviet Geography, April 1982, pp .287-290 ; May 1979, p . 332 ; February 1979, p . 126 ; September 1982, pp . 540—543, 545—548 ; March 1983, p . 252 ; Dienes and Shaba d [1979, pp . 103—130], CIA [1982, p . 205] .

1 1 5

Table 1 1

COAL CONSUMPTION BY CENTRAL ELECTRICAL POWER STATION S (Deliveries )

Basin Amount (million tons )

TOTAL 299 . 3

Ekibastuz 62 . 4 Kansk—Achinsk 23 . 3 Kuznets (open—pit) 39 . 7 Donets 59 . 7 Moscow 21 . 8 Chelyabinsk (Kopeysk) 10 . 1 Kizel 2 . 1 L'vov—Volyn 7 . 3

Other 72 . 9 of this : * Angren 5 . 7 East Siberia/Far East 11 . 0 Karaganda 12 . 0 Pechora (Inta) 9 . 0 Kuznets (deep—mined) 35 . 0

* Disaggregation of the " other" deliveries are only estimates o f what seems probable given the installed capacity of the station s being served by the various coal fields, coking coal deliveries , and gross output levels .

Sources : Nekrasov and Troitskiy [1981, pp .225,228] ; "News Notes, " SG—December 1982, p .770 ; April 1982,pp . 287—290 ; Septembe r 1982, pp . 540—543 ; 545—548 .

1 1 6

Table 1 2

ESTIMATED COAL DELIVERIES IN 198 0 (without coking coal — million tons )

To Centra l Region All Deliveries Power Stations To Other User s

Northwest 21 .3 0 21 . 3 Center 75 .4 34 .3 41 . 1 Volga—Vyatka 8 .1 0 8 . 1 Cen .Chernozem 6 .0 0 6 . 0

Volga 20 .6 0 20 . 6 Urals 78 .4 61 .2 17 . 2 No . Caucasus 12 .9 3 .8 9 . 1 West Siberia 65 .6 50 .8 14 . 8

East Siberia 35 .5 28 .3 7 . 2 Far East 11 .5 6 .0 5 . 5 Ukraine 117 .2 74 .2 43 . 0 Belorussia 8 .4 0 8 . 4

Baltic 6 .2 0 8 . 4 Transcaucasus 9 .1 0 9 . 1 Central Asia 11 .1 2 .7 8 . 4 Kazakhstan 43 .8 32 .4 11 . 4 Moldavia 7 .9 6 .5 1 . 4

Sources : Aggregated from city and electrical station allocations .

117

Table 1 3

ILL COAL DELIVERIE S (million tons )

All Dellveries Donets Kuznets Karaganda Ekibastu z Reglon 1970 1975 1970 1975 1970 1975 1970 1915 1970 197 5

Northwest 29 .5 28 .4 3 .8 l .0 6 .5 1 .8 0 0 0 0 Lenlngrad c . 2 .9 1 .7 .9 .2 l .6 l .2 0 0 0 0 Leningrad O . 3 .9 4 .2 1 .6 .4 1 .1 3 .0 0 0 0 0 Central 47 .0 51 .3 10 .1 5 .0 4 .3 11 .4 neg . neg . 0 0 M0scow c . 2 .8 3 .6 l .9 l .4 .9 2 .6 0 0 0 0 Moscow O . 9 .7 8 .7 3 .6 1 .2 1 .5 3 .2 0 neg . 0 0 Tula 0 . 21 .3 21 .1 1 .8 .2 .3 2 .3 0 0 0 0

Cen . Chernozem 13 .2 14 .1 8 .5 1 .5 1 .9 3 .4 neg . .4 0 0 Volga 17 .4 14 .9 4 .l 2 .9 5 .9 3 .9 3 .3 3 .6 0 0 N0 . Caucasus 13 .2 14 .9 13 .0 14 .1 neg . neg . 0 0 0 0 Urals 81 .8 80 .l .2 .2 21 .1 20 .9 9 .8 9 .5 10 .4 23 . 6 Nest Siberia 60 .1 75 .4 ne g . neg . 51 .9 62 .8 0 neg . 1 .5 2 . 9 Ukralne 144 .5 165 .5 121 .0 139 .l neg . l .7 0 2 .1 0 0 Central Asia 10 .2 13 .0 neg . neg . .4 .6 l .9 3 .0 0 0

Kazakhstan 42 .3 55 .0 neg . neg . 9 .2 10 .1 20 .9 24 .4 11 .0 19 . 3 Belorussia 6 .5 3 .l 5 .0 1 .8 0 0 0 0 0 0 Moldavla 4 .5 5 .6 4 .l 5 .2 0 0 0 0 0 0 Transcaucasus 3 .6 3 .2 l .8 l .6 0 0 0 0 0 0 East Slberia 46 .5 51 .9 0 neg . .4 .2 0 0 0 0 Far East 30 .6 36 .0 0 0 0 0 0 0 0 0

Total 591 .5 657 .8 197 .9 191 .8 108 .5 129 .l 36 .1 43 .4 23 .0 45 . 8

Source : Dublnskly (1917, p . 32] .

1 1 8

Table 1 4

APPROXIMATE STRUCTURE OF EAST-WEST COAL FLOWS IN 198 0 (amount in million tons )

Origin Destination_ Amount Purpos e

Ekibastuz Urals 33 stea m Ekibastuz European USSR 1 stea m

Angren European USSR 3 stea m

Kuznets European USSR 12 steam Kuznets European USSR 18 cokin g Kuznets Urals 16 steam Kuznets Urals 17 coking

Karaganda Urals 14 coking Karaganda European USSR 6 stea m

TOTAL 120

Note : Osleeb and ZumBrunnen [1984] suggest a flow of 3 millio n tons of coking coal from Karaganda to the Urals, a flow o f 9 million tons of coking coal from the Kuzbas to the Urals , and a flow of 9 million tons of coking coal to the Europea n USSR from the Kuzbas for use in ferrous metallurgy .

Sources : Nekrasov and Troitskiy [1981,, pp . 225, 228] ; "New s Notes," Soviet Geography : Review and Translation, Vol . 23 , no . 10 [December 1982], p . 770 ; Vol . 23, no . 5 [May 1982] , p . 374 ; Vol . 23, no . 8 [September 1982], p . 546 ; estimate s in text .

1 1 9

Section V . REFERENCE S

Biryukov, 1982 : V . Ye . Biryukov et al . Ratsionalizatsiy a perebozok gruzov (Moscow : Znaniye, 1982) .

Campbell, 1980 : Robert W . Campbell . Soviet Energy Technology : Planning, Policy, Research and Development (Bloomington : Indiana University Press, 1980) .

CIA, 1980 : Central Intelligence Agency . USSR : Coal Industr y Problems and Prospects, ER 80—10154 (February 1980) .

CIA, 1982 : Central Intelligence Agency . "Sluggish Soviet Steel Industry Holds Down Economic Growth," in U .S . Congress , Joint Economic Committee . Soviet Economy in the 1980's : Problems and Prospects (Washington, D .C . : U .S . Governmen t Printing Office, 1982), pp . 195-215 .

Danilov et al ., 1983 : A . D . Danilov et al . Ekonomicheskay a geografiya SSSR (Moscow : Vysshaya shkola, 1983) .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . The Soviet Energy System : Resource Use and Policie s (Washington, D .C . : Winston and Sons, 1979) .

Dubinskiy, 1977 : P . K . Dubinskiy . Analiz rabot y zheleznodorozhnogo transorta ugol'noy promyshlennosti v devyatey pyatiletke (Moscow : TsNIEIugol', 1977) .

Gankin et al ., 1972 : M . Kh . Gankin et al . (eds .) . Perevozk i gruzov (tendensey razvitiya i puti ratsionalizatsiy ) (Moscow : Transport, 1972) .

Gustafson, 1982 : Thane Gustafson . "Soviet Energy Policy," i n U .S . Congress, Joint Economic Committee . Soviet Econom y in the 1980's : Problems and Prospects, Part I (Washington , D .0 U .S . Government Printing Office, 1982), pp . 431—456 .

1 2 0 Hunter and Kaple, 1983 : Holland Hunter and Deborah Kaple . "Th e Soviet Railroad Situation," Working Paper No . 4 (Wharto n Econometric Forecasting Associates, Inc ., September 1983) .

Huzinec, 1978 : George Huzinec . " The Impact of Industria l Decision—Making upon the Soviet Urban Hierarchy ." Urba n Studies, Vol . 15, no . 2 (June 1978), pp . 139—148 .

Izvestiya, 6 July 1984 .

Kazanskiy, 1980 : N . N . Kazanskiy (ed .) . Geografiya pute y soobshcheniya (Moscow : Transport, 1980) .

Kontorovich, 1982 : Vladimir Kontorovich . A Case Study o f Transportation in the Urals, West Siberia and Nort h Kazakhstan (Washington, D .C . : Wharton Econometri c Forecasting Associates, December 1982) .

Kurtzweg and Tretyakova, 1982 : Laurie R . Kurtzewg and Albin a Tretyakova . "Soviet Energy Consumption : Structure an d Future Prospects," in U .S . Congress, Joint Economi c Committee . Soviet Economy in the 1980's : Problems an d Prospects, Part I (Washington, D .C . : U .S . Governmen t Printing Office, 1982), pp . 355-390 .

Lydolph, 1979 : Paul E . Lydolph . Geography of the USSR : Topica l Analysis (Elkhart Lake, Wis . : Misty Valley, 1979) .

Mitrofanov, 1977 : V . F . Mitrofanov . "Razvitiye gruzovyk h pervozok v desyatoy pyatiletke," Zheleznodorozhny y transport, No . 6 (1977), pp . 81-88 .

Narkhoz SSSR 1922—72 : TsSU (Tsentral ' noye statisticheskoy e upravleniye pri Sovete Ministrov SSSR) . Narodnoy e khozyaystvo SSSR v 1922— 1972 ; yubileynyy statisticheski y yezhegodnik (Moscow : Statistika, 1972) .

Narkhoz SSSR 1980 : TsSU . Narodnoye khozyaystvo SSSR v 1980 godu ; statisticheskiy yezhegodnik (Moscow : Finansy i statistika , 1981) .

Nekrasov and Troitskiy, 1981 : A . M . Nekrasov and A . A . Troitskiy . Energetika SSSR v 1981—1985 godakh (Moscow : Energoizdat , 1981) .

1 2 1

" News Notes," SG— ... : Theodore Shabad . "News Notes," Sovie t Geography : Review and Translation : 1979 : Vol . 20, no . 2 (February), p . 12 6 no . 5 (May), p . 33 2 1980 : Vol . 21, no . 3 (March), pp . 187-19 0 1982 : Vol . 23, no . 3 (March), p . 19 7 no . 4 (April), pp . 287-29 0 no . 5 (May), p . 37 4 no . 7 (September), pp . 540—54 8 no . 10 (December), pp . 769—77 2 1983 : Vol . 24, no . 3 (March), pp . 249—25 6 1984 : Vol . 24, no . 4 (April), pp . 280—284, 290—291 .

Osleeb and ZumBrunnen, 1984 : Jeffrey P . Osleeb and Crai g ZumBrunnen . The Soviet Iron and Steel Industry (Totowa , N .J . : Rowman and Allanheld, 1984) .

OTA, 1981 : U .S . Congress, Office of Technology Assessment . Technology and Soviet Energy Availability (Washington , D .C . : Office of Technology Assessment, 1981) .

Rodgers, 1983 : Allan L . Rodgers . "Commodity Flows, Resourc e Potential and Regional Economic Development : The Example o f the Soviet Far East," in Robert G . Jensen et al . (eds .) . Soviet Natural Resources in the World Economy (Chicago : University of Chicago Press, 1983), pp . 188—213 .

SEV, 19-- : SEV . Statisticheskiy yezhegodnik stran—chlenov sovet a ekonomicheskoy vzaimopomoshchni (Moscow : Finansy i statistika, 19--), volumes for 1976 and 1981 were used i n this report .

Shafirkin, 1978 : B . I . Shafirkin . Ekonomicheskiy spravochni k zheleznodorozhnika, chast II (Moscow : Transport, 1978) .

Tretyakova, 1980 : Albina Tretyakova . "Coal Industry . " Unpublished working paper . Center for Internationa l Research (Washington, D .C . : U .S . Bureau of the Census : 1980) .

Tretyakova, 1984 : Albina Tretyakova . Expenditures on Fuels i n the USSR to 1990, Foreign Economic Report, No . -- . (Washington, D .C . : U .S . Bureau of the Census [forthcoming] )

1 2 2 VI . TRANSMISSION CONSTRAINTS IN SOVIET ELECTRICIT Y

A . Introductio n

In this section, the spatial dimensions of electrical flows i n

the Soviet Union for 1980 are analyzed in order to identif y

transmission constraints in the electrical network . Thi s

represents an update of a previous study done for 1975 [Sager ^

and Green, 1982] . Again, the analsis is limited to an examinatio n

of hypothetical patterns of flow in the Soviet electrical syste m

under average (assumed to be typical) conditions because of lac k

of data . Little is known about the magnitudes or directions o f

actual flows, even among the major grid systems . In order t o

examine these hypothetical flows, the Soviet electrical system i s

generalized into an abstract network consisting of supply node s

(power stations), demand nodes (cities and export points), an d

bounded arcs (transmission lines) . A network allocation model ,

the out—of—kilter algorithm, is then applied to the abstracte d

system to generate optimal flows of electricity between the suppl y

and demand nodes .

Electrical power is analyzed as it is a key component of th e

total Soviet energy economy and one of its most versatile forms o f energy . Electricity generation accounted for nearly 40% of th e

1 2 3

primary energy available for domestic consumption in 198 0

[Campbell, 1983, p . 198], whereas in 1975, it was less than 30 %

[Dienes and Shabad, 1979, p . 19] . This reflects the fact that a n

increasing proportion of energy has been consumed in the form o f

electrical power as the Soviet economy has developed . Thi s

pattern is typical of many countries because the versatility an d

technical advantages of electricity in a widening range o f

manufacturing activities and other uses make electrification a n

important aspect of the process of economic development . Th e

electrical power industry occupies a central position in Sovie t

thinking on economic development, summarized in Lenin's famou s

dictum : "Communism is Soviet power plus the electrification o f

the entire country . "

Geographically, the transmission of electricity is importan t

because the increasing shipments of eastern coal over the lon g

distances to the European USSR are placing a growing burden on th e

railroads . To resolve this problem, the Soviets plan to shi p

energy from the eastern coal basins in the form of electrica l

power from mine—mouth stations by extra—high-voltage (EHV) line s

[Nekrasov and Troitskiy, 1981, pp . 31—33 ; Vernikov, 1981] . Som e

EHV lines are being constructed in the current FYP as part of thi s

program ["News Notes," SG—March 1980, pp . 187—190] .

Only the portions of the system connected into the unifie d

countrywide grid in 1980 are included in the analysis . Thi s

comprises nine of the USSR's eleven major grid systems . These ar e

1 2 4 the Central, Northwest, Volga, South, Urals, North Caucasus ,

Transcaucasus, North Kazakhstan, and Siberian grids . The Centra l

Asian and Far Eastern grids are excluded . These large unifie d grid systems were formed to take advantage of scale economies, o f savings on reserve capacity, and of an expanded choice o f generating sources such as shale or hydroelectrical power tha t have low transportability . Some of the characteristics of th e major grids in 1980 are given in Table 15 .

Supply nodes in the network consist of large Soviet powe r stations . All stations with capacities in excess of 1000 MW i n

1980 are included as well as selected smaller stations, for a total of 110 supply nodes . The supply available at each i s determined by installed capacity, subject to the limitation tha t the total for each grid is set at its average availability (it s capacity factor multiplied by total capacity ; both are given i n

Table 15) ; i .e ., approximately the grid's average annual load .

In the network, demand nodes are used to represent electricit y consumption sites . While data on the sectoral distribution o f electricity consumption are available in some detail, data on th e spatial distribution of consumption are fairly limited .

Consumption data are reported for the fifteen republics (Tabl e

16), but not for any smaller spatial units . However, some spatia l disaggregation of consumption is possible for the RSFSR an d

Kazakhstan, two of the largest republics .

1 2 5 The northeastern part of Kazakhstan is in the North Kazakhsta n grid and the Gur'yev area in western Kazakhstan was connected wit h the Volga grid during the 10th FYP [Nekrasov and Troitskiy, 1981 , p . 198], so both areas are tied into the unified countrywid e system . The southern part of the republic is in the Central Asian grid, and a small isolated system exists in the Shevchenko area .

The latter are not tied into the unified countrywide system, an d thus are not included in the analysis . Consumption for th e different parts of Kazakhstan can be estimated using th e information in Tables 15 and 16 . Apparently 13 .8 billion KWH wer e consumed in the southern part of Kazakhstan in the Central Asia n grid and 8 .8 billion KWH were produced (and therefore probabl y consumed) at Shevchenko and Gur'yev,* leaving 49 .5 billion KWH t o be consumed in the North Kazakhstan grid . This means that th e

North Kazakhstan grid was a net importer of about 5 .1 billion KW H in 1980 despite the on—going development of the Ekibastuz powe r complex .

Within the RSFSR, consumption in the Far Eastern grid was 15 . 5 billion KWH and approximately 49 .9 billion KWH was consumed in th e

* Imports or exports cannot be ruled out for Gur'yev, althoug h they are unlikely . Gur'yev's integration into the Volga grid wa s probably for flexibility and exchanges of power . The 8 .8 billio n KWH is allocated between the two areas based upon the size of th e cities . Thus consumption at Shevchenko is estimated at 4 . 1 billion KWH, with 4 .7 billion KWH at Gur'yev .

1 2 6 remaining isolated systems (Table 15) . The RSFSR's isolate d

systems in 1980 were all in the east (e .g ., Noril ' sk, Nadym -

Urengoy, Vilyuysk-Lensk, Yakutsk, Magadan, Sakhalin, Kamchatka ) with the integration of the Komi ASSR into the unified nationa l grid in the late 1970's [Neporozhniy, 1980, p . 235] . In fact, th e

" Other " category in Table 15 probably represents the Komi gri d

(and perhaps Gur'yev), since no such category was listed in 197 5 before the Komi grid was connected [Nekrasov and Pervukhin, 1977 , p . 165] . Therefore consumption in the Far Eastern and the othe r

isolated grids (15 .5 and 49 .9 billion KWH, respectively) can b e subtracted from the RSFSR total (815 .9 billion KWH) to give th e amount consumed in the portion of the RSFSR within the nationa l unified grid (i .e ., 750 .5 billion KWH) .

Ryl ' skiy [1981, p . 108] infers that electricity consumption i n the RSFSR ' s eastern regions in 1980 was about 225 billion KWH, o f which 15 .5 billion would be in the Far Eastern grid and 49 . 9 billion KWH in the isolated systems . Thus consumption was abou t

159 .6 billion KWH in the Siberian grid and the portion of Tyumen '

Oblast in the Urals grid in 1980 . This compares with 147 . 6 billion KWH reportedly consumed in the Siberian grid system i n

1975 [Neporozhniy, 1980, p . 311] . Thus 590 .9 billion KWH wer e consumed in the European portion of the RSFSR, with 20% (11 9 billion KWH) in the Northwest and Volga-Vyatka regions and 70 %

(414 billion KWH) within the Center, Volga, and Urals [Ryl'skiy ,

1981, p . 101], leaving 10% (59 billion KWH) for the North Caucasu s and Central Chernozem regions .

1 2 7 Since the republics are generally too large to serve as deman d

areas, oblast—level units are used, with the oblast center s

serving as the demand nodes in the network . Therefore the averag e

hourly consumption in each region is allocated among its oblast —

level spatial units according to population,* with two exceptions .

The allocation within the Ukraine uses 1967 data from Voloboy an d

Popovkin [1972, p . 221] on relative levels of consumption amon g

the Ukrainian oblasts to distribute the Ukrainian total for 1980 .

The Urals had a per capita consumption in 1965 (the most recen t year for which data are available) not only twice the Sovie t average, but nearly twice that in the Volga and Center [Dienes an d

Shabad, 1979, p . 210] . Therefore the allocation among the Center ,

Volga, and Urals gives a double weight to the Urals' oblasts .

* This includes the other nine republics in the national unifie d grid (Ukraine, Belorussia, Georgia, Azerbaijan, Lithuania , Moldavia, Latvia, Armenia, and Estonia) plus consumption a s estimated above for the regions of the RSFSR and Kazakhstan . Eac h region or republic's gross consumption in billion KWH is divide d by 8760, the number of hours in a year, to provide the averag e hourly consumption in each area .

1 2 8 Thus electricity consumption in the Central region is estimated a t

17,295 MW per hour, with 11,284 MW for the Volga, and 18,581 MW for the Urals . *

The use of population data as a surrogate for electrical powe r consumption is somewhat questionable, because industry is th e major user of electricity in the USSR, accounting for 63 .5% o f useful domestic consumption in 1980 [Nekrasov and Troitskiy, 1981 , p . 46] . However, the spatial distributions of industria l production and population are very similar [Runova, 1976], an d there is a high correlation between population and electricit y consumption, at least among the republics [Sagers and Green, 1982 , p . 294] . Also, where per capita consumption is known to var y significantly within the spatial units for which consumption dat a can be estimated, such as within the Ukraine or for the Urals —

Center—Volga, the allocation is adjusted to reflect this .

Oblast centers serve as the domestic demand nodes . They ar e good centroids of the demand originating in each oblast becaus e the industry and urban population of each oblast tend to be highl y

* Recent data indicate that electricity consumption in the Ural s region amounts to about one—sixth of Soviet production [Danilov e t al ., 1983, p . 311], which would be about 216 billion KWH (24,61 8 MW per hour) in 1980 . This includes the Bashkir ASSR as th e result of a 1982 boundary change ["News Notes," SG—March 1983, pp . 248—249] . The estimate above for the Urals region in its 198 0 boundaries with Ufa ' s demand (2291 MW), representing the Bashki r ASSR, sums to 20,872 MW per hour .

1 2 9 concentrated in the administrative center [Huzinec, 1978] . In th e

few instances where an oblast contains a major industrial cente r

that is not the administrative focus such as Cherepovets ,

Magnitogorsk, or Novokuznetsk, the total estimated demand for th e

oblast is split among the cities according to population size . A

total of 148 domestic demand nodes (cities) are included in th e

network . The largest demand node in the system is Moscow (862 1

MW), accounting for about 7 .4% of Soviet consumption . The secon d

largest is Sverdlovsk at 3781 MW, while the smallest demand nod e

is Chernovsty in the Ukraine at 97 MW .

Exports, totalling 19 .9 billion KWH in 1980 [Vneshtorg 1980 ,

p . 25] (2272 MW per hour), are assigned to five export points a t

the Soviet border . The first, covering exports to Poland, i s

located north of L'vov (and is also connected with Brest), whil e

the second, representing exports to Hungary, Czechoslovakia, an d

Romania, is located at Mukachevo . Exports to Bulgaria ar e

assigned to a node located at Izmail, while exports to Mongoli a

are covered by a node south of Gusinoozersk . Exports to Finlan d are represented by a node at Vyborg (Figure 10) .

In addition to the 148 domestic demand nodes, 5 export nodes , and 110 supply nodes, there are 9 intermediate nodes in th e network . They are added to allow for junctions or changes i n capacity at other than supply of demand nodes . The intermediat e nodes are all cities or towns (Baykalsk, Bugul'ma, Syzran' ,

Karsun, Mikhaylov, Konosha, Mikun, Chudovo, and Arzamas) .

1 3 0 Bounded arcs represent the electrical transmission lines . Th e capacity of each arc is set by an -upper bound determined by th e rated kilovolt–amperes (KVA) for the lines represented by the arc .

The USSR has high–voltage lines of 220, 330, 500, and 75 0 alternating current (AC) KVA and 800 direct current (DC) KVA .

Lines of 1150 KVA are under construction, and there are plans t o build 1500 (DC) KVA lines . Although the capacity of these line s varies with construction details and weather conditions, thes e lines are given capacities of 250, 400, 1000, 2000, 700, 3400 an d

6000 MW, respectively [Vernikov, 1982, p . 36 ; Campbell, 1980, p .

181] . Although it is planned for the 1150 KVA lines to eventuall y transmit at 3400 MW, initially the lines are being powered at onl y

500 KVA (1000 MW) ["News Notes," SG–March 1980, p . 190 ; Kaz .

Pravda, 25 December 1983, p . 1] . The alignment of these lines i s taken from several Soviet maps of the system [e .g ., Neporozhniy ,

1980 ; JPRS L/10822, 1982] .

Distance is a critical consideration in the cost of trans – porting electricity because of energy loss in the transmissio n lines as distance increases . A number of factors influences lin e resistance and therefore power loss . A key factor, however, i s voltage ; the higher the voltage, the less the line loss . I n general, the power loss amounts to approximately 10% for ever y hundred miles [Green and Mitchelson, 1981] . Thus without extra- high–voltage lines, line losses restrict power transmissions t o less than 1000 miles [Dienes and Shabad, 1979, p . 211] . Therefor e in the model, the length of an arc represents the cost o f

1 3 1 utilizing it . The length of each arc is determined as th e spherical distance between terminal nodes, calculated from thei r latitude and longitude .

B . Model Result s

The problem as outlined above turns out to be infeasibl e because of the widespread lack of transmission capacity to mee t the consumption needs of the demand nodes as modeled . This resul t is not totally unexpected, as the system already was capacitate d in many areas in 1975 [Sagers and Green, 1982] . Although gros s consumption of electricity increased only by 24% between 1975 an d

1980 while the length of 500 and 750 KVA lines increased by 33 %

[Nekrasov and Troitskiy, 1981, p . 183], apparently the increase i n consumption was not uniform throughout the country . The extr a strain on the system indicates that the increase in consumptio n was confined largely to the energy—short European USSR .

The infeasibility of the problem as modeled results fro m several factors . First, consumption is more spatially disperse d than in the model . Smaller cities, towns, hamlets, and village s contribute to the total consumption for each spatial unit and ar e served by a local distribution network not included in the model .

Second, in the larger cities, small TETs (heat and power stations ) provide electricity on site, reducing the need for electrica l

1 3 2 transmission over the main lines from the larger centra l

electrical stations . Third, consumption as assigned to the deman d

nodes includes losses .

To partially compensate for these factors, consumption i s

reduced uniformly by 10% for all domestic demand nodes . Thi s

corresponds to the share of agriculture, one of the most spatiall y

dispersed users, in net consumption [Nekrasov and Troitskiy, 1981 ,

p . 46] . With this adjustment, the problem becomes feasible . Thi s

indicates that consumption is more dispersed in 1980 than in 1975 .

In addition to this adjustment to demand, the extra—high—voltag e

lines of 1150 KVA currently under construction or planned must b e

included in order to obtain a feasible solution . Their level o f

utilization in the model (discussed below) will indicate for whic h

lines construction appears warranted .

The general pattern of hypothetical flows in the Sovie t electrical system for 1980 is shown in Figure 10 . The larges t single flow in the network is between Novokuznetsk and Barnaul, i n

Siberia, over one of the planned EHV lines . The model—generate d

flow is 3400 MW per hour over the arc, its assigned capacity . A flow of 3346 MW per hour is generated between Ekibastuz an d

Kokchetav, and there is a flow of over 3000 MW between Yermak an d

Ekibastuz (Figure 10) ; both occur over EHV lines . All told, 2 5 arcs have flows in excess of 1500 MW (Table 17), over twice a s many as in 1975 [Sagers and Green, 1982, p . 298] . Of these, 1 7 have flows of 2000 MW or more . For about half, these massiv e flows exceed the arc's rated capacity .

1 3 3 The flows shown in Figure 10 are aggregated by major powe r

grid into a flow matrix . This matrix indicates an exchange o f

13,833 MW per hour among the major grid systems, or about 12 1

billion KWH annually . This amounts to 9 .4% of Soviet electricit y

production . Together with Soviet exports to neighborin g

countries, the modeled inter—regional exchange of power is abou t

10 .9% of production . This represents a considerable increase i n

the proportion being transferred among the grid systems, as it wa s

only 5 .4% in 1970 and about 7 .7% in 1975 [Sagers and Green, 1982 ,

p . 297] . Increased regional interdependence results from the sam e

factors that led to the organization of the large, unified gri d

systems : scale economies, savings on reserve capacity, and th e

utilization of generating sources with low transportability .

The flow matrix shows the Center to be by far the larges t

importer, just as it was in 1975 . Its net imports of power amoun t

to 14 .4 billion KWH annually (Table 18) . This is at about th e

same level as they were in 1975 [Dienes and Shabad, 1979, p . 194] .

Most of the imported power comes from the Northwest grid, wit h

smaller amounts from the Volga grid and the South .

The model indicates that the other major power importer is th e

Urals grid . The region is in fact reported to import considerabl e

electricity from the neighboring regions [Danilov et al ., 1983 ,

p . 312] . The model shows the Urals grid required about 7 . 2 billion KWH more than it produced in 1980 (Table 18) .

The Volga grid shows a continuation of the 1970—75 trend, wit h

a slow deterioration in its relative position . It was one of th e

1 3 4 largest exporters in the early 1970's, and still was a ne t exporter of several billion KWH in 1975 [Dienes and Shabad, 1979 , p . 194] . However, the model indicates the grid had a slight powe r deficit by 1980 (Table 18) .

The South, which had been the largest exporter in 1975, stil l is shown as being a net exporter in 1980, but only of some 1 . 9 billion KWH (Table 18), most of which goes to the Center . I n contrast, it had a surplus of about 20 billion KWH in 1975 [Diene s and Shabad, 1979, p . 194] . However, the South did account fo r almost all of the 19 .9 billion KWH exported abroad in 1980, s o most of the grid ' s power surplus in 1980 evidently was bein g transmitted to other countries rather than to other regions withi n the USSR .

Interestingly, the North Kazakhstan grid is shown as a ne t exporter of power in the optimal solution (Table 18), althoug h when its consumption in 1980 was estimated above, it was actually a net importer . The discrepancy is undoubtedly due to includin g within the model the 1150 KVA line to the Urals from Ekibastuz , still under construction ["News Notes," SG—April 1984, pp . 290 —

291] .

The largest exporter of power in the model is the Siberia n grid (11 .1 billion KWH) (Table 18) . Since this power surplus i s transmitted through the planned EHV lines across Kazakhstan to th e

Urals, the modeled results probably do not reflect the Siberia n gri d ' s true situation, as the transmission capacity to effect thi s transfer did not exist in 1980 .

1 3 5 Soviet generating capacity is more than ample to meet demand ,

as demand is satisfied with almost all plants operating at norma l

generating capacity as assigned . This is as it should be sinc e

the model is of average rather than peak load . In fact, som e

stations are underutilized in the model .

However, the spatial separation of supply and demand point s

together with insufficient transmission capacity can lead t o

potential shortages of electrical power for certain areas . In th e

Soviet system, the lack of transmission capacity is far mor e

severe than a shortage of generating capacity . Well over a fourt h

of the arcs in the system have flows equal to or greater tha n

their assigned capacity, a higher proportion than in 1975 [Sager s

and Green, 1982, p . 299] . Although capacitated arcs occu r

throughout the USSR, the region with the most severe lack o f

transmission capacity is the Urals . Some arcs in the regio n

(e .g ., Troitsk—Magnitogorsk) must operate at 400% of assigne d capacity, and many operate at 200% of capacity .

The lack of transmission capacity in the region is als o

indicated by the opportunity costs provided by the model for eac h of the arcs . These show the recduction in costs that would occu r if more transmission capacity were available for each arc . Th e arcs with the highest opportunity costs (and therefore serve a s the most binding constraints on the efficient distribution o f electricity) are in the Urals . Another area with high opportunit y costs is the Moscow region . Other than these areas, th e

1 3 6 occurrence of capacitated arcs is isolated, usually involving a short connection between a station and a nearby city .

The region with the most severe shortcomings in transmissio n capacity in 1975 was West Siberia [Sagers and Green, 1982, p .

299], particularly the Barnaul—Novokuznetsk area . This proble m does not appear in the 1980 solution because the planned 1150 KV A

lines are incorporated in the model as if they were operational .

It is interesting to note that the largest flow generated in th e

1980 solution is between Barnaul and Novokuznetsk, on an EHV line .

The level of utilization of the planned 1150 KVA line s

indicates that their construction is warranted . They are al l heavily utilized, carrying the largest flows in the system (Tabl e

17) . Since the demand is for 1980, the need for the new lines i s obviously quite critical . This is also indicated by the fact tha t

the problem is infeasible without them . This particularly affect s the Urals . Because of the region ' s large demand, attempting t o achieve a solution without the EHV arcs raises havoc in a larg e area extending from Moscow to West Siberia .

In a second simulation, the proposed 1500 KVA (DC) line fro m

Ekibastuz to the European USSR was added to the network . Th e results, shown in Figure 11, indicate that this project would b e best deferred to a later time . The initial section of the lin e from Ekibastuz west to Orsk is not utilized at all . Although th e other two sections of the line (Orsk—Saratov and Saratov—Tambov ) carry some current (356 and 1589 MW, respectively), the flow i s

1 3 7 reversed, going from west to east . This perverse flow is th e result of the large power demand in the Urals, although a revers e flow of this nature is not possible on a direct current line .

The need for expanded development of the Kansk-Achinsk Basi n in the near future also does not seem warranted . Construction o f the Nazarovo-Novokuznetsk EHV line, connecting the Basin's mine - mouth stations with the West Siberian industrial complex in th e

Kuzbas, is needed since it is relatively heavily utilized (152 9

MW) (Table 17) . But currently, the power needs of the Kuzbas see m to be met sufficiently by existing capacity (e .g ., Sayan -

Shushenskoye, Nazarovo), once they are connected with 1150 KV A lines . However, increases in consumption during the 1980's wil l probably require more thermal generating capacity, particularly t o meet winter demand . This could take place in the Kansk-Achins k

Basin, so the slow construction pace envisioned for th e

Berezovskoye station and the overall development of the Kansk -

Achinsk Basin during the next decade appears justified ["New s

Notes," SG-March 1983, pp .249-256] .

C . Conclusion s

Overall, the Soviet electrical network is operating under fa r more strain than in 1975 . A higher percentage of the system' s arcs are capacitated, and the problem proves to be infeasibl e without adjusting for greater dispersion of consumption an d

1 3 8 including planned extra-high-voltage lines as if they wer e operational . Therefore the analysis is more tentative than fo r

1975 . However, it seems clear that the main problem in the Sovie t electrical network is the lack of transmission capacity , particularly in the Urals . The solution gives an approximation o f the magnitude and direction of flows of electricity that largel y conform with previously established trends .

In terms of policy implications, the planned EHV network o f

1150 KVA lines in the Siberia-Kazakhstan-Urals region i s definitely needed . All these arcs are heavily utilized in th e model . In contrast, the construction of the 1500 KVA (DC) lin e from Ekibastuz to the Center does not appear justified as yet .

1 3 9 Figure 1 0 . Electricity Transmissions in 1980 Figure 11 . Electrical Transmissions with Planned 1500 KVA Line

Table 1 5

CHARACTERISTICS OF THE SOVIET GRID SYSTEMS IN 198 0

Annual Averag e Installed Production Annua l Capacity Percent (billion Load Capacit y System (MW) Hydro KWH) (MW/hr) Facto r

USSR Unified Grid 223,400 19 .4 1,152 .7 131,600 .5 9 of which : Center 39,300 9 .4 197 .1 22,500 .5 7 Volga 15,700 26 .1 77 .8 8,900 .5 7 Urals 30,,800 5 .5 188 .1 21,500 .7 0 Northwest 25,900 15 .8 130 .1 14,900 .5 7 South 44,600 9 .0 249 .8 28,500 .6 4 N . Caucasus 10,000 19 .0 49 .0 5,600 .5 6 Transcaucasus 10,500 38 .1 43 .0 4,900 .4 7 N . Kazakhstan 8 .900 12 .4 44 .4 5,100 .5 7 Siberia 35,100 53 .3 162 .7 18,600 .5 3 Other 2,600 0 .0 10 .7 1,200 .4 7

Central Asia 18,400 35 .3 71 .7 8,200 .4 4 Far East 4,000 32 .5 15 .5 1,800 .4 4

All Integrated Grids 245,800 20 .8 1,239 .9 141,500 .58 Isolated Grids 20,900 5 .7 54 .0 6,200 .29

USSR Total 266,700 19 .6 1,293 .9 147,700 .55

Source : Columns 1-3 : Nekrasov and Troitskiy [1981, p .200] . Column 4 : Yearly production (column 3) divided by 8760 . Column 5 : Average annual load (column 4) divided by maximum possible loa d (installed capacity [column 1] multiplied by 8760) .

1 4 2

Table 1 6

REPUBLIC ELECTRICITY CONSUMPTION IN 198 0 (billion KWH )

Useful Tota l Republic Production Consumption Losses Consumptio n

RSFSR 804 .9 752 .2 63 .7 815 . 9 Ukraine 235 .9 199 .9 19 .2 218 . 4 Belorussia 34 .1 29 .1 2 .9 32 . 0 Kazakhstan 61 .5 66 .8 5 .3 72 . 1 Georgia 14 .7 11 .7 2 .3 13 . 9

Azerbaijan 15 .0 15 .0 2 .1 17 . 1 Lithuania 11 .7 10 .1 1 .4 11 . 6 Moldavia 15 .6 7 .3 1 .2 8 . 4 Latvia 4 .7 7 .3 1 .2 8 . 2 Kirgizia 9 .2 5 .6 .6 6 . 2

Tadjikistan 13 .6 8 .8 .9 9 . 7 Armenia 12 .0 10 .4 1 .4 11 . 8 Turkmenia 6 .7 4 .9 .8 5 . 7 Estonia 18 .9 7 .2 1 .0 8 . 2 Uzbekistan 35 .4 33 .3 3 .0 36 . 3

USSR Total 1,293 .9 1,082 .9 191 .1 1,274 . 0

Sources : Electro—balances of the various republics published i n the republic statistical handbooks ; Armenia determined as a residual ; USSR totals from Nekrasov and Troitskiy [1981, pp . 45-71] .

1 4 3

Table 1 7

POWER TRANSMISSIONS OVER 1500 MW PER HOU R

Arc Flow Arc Capacity_ Grid

Novokuznetsk — Barnaul 3400 (3400) Siberi a Ekibastuz — Kokchetav 3346 (3400) Kazakhsta n Yermak — Ekibastuz 3069 1000 +(3400) Kazakhsta n Kokchetav — Kustanay 2750 (3400) Kazakhsta n Kustanay — Chelyabinsk 2746 (3400) N .K .—Ural s

Krasnoyarsk — Nazarovo 2614 2000 Siberi a Pavlodar — Yermak 2590 1000 + (3400) Siberia—N .K . Bratsk —Irkutsk 2526 2250 Siberi a Konakovo — Moscow 2500 3000 Cente r Zainsk — Kazan' 2427 1000 Volg a

Barnaul— Pavlodar 2411 (3400) Siberia—N .K . Votkinsk. — Izhevsk 2159 1000 Ural s Chudovo — Kalinin 2139 2400 NW—Cente r Sayanogorsk — Novokuznetsk 2004 (3400) Siberi a Kashira — Moscow 2000 2000 Cente r

Troitsk — Magnitogorsk 2000 500 Ural s Reftinsk — Sverdlovsk 2000 1000 Ural s Magnitogorsk - Ufa 1956 1000 Ural s Saratov — Syzran' 1846 1000 Volg a Uglegorsk — Gorlovka 1742 400 Sout h

Gusinoozersk — Ulan—Ude 1738 500 Siberi a Nazarovo — Anzhero—Sudzhensk 1616 2000 Siberi a Nazarovo— Novokuznetsk 1529 (3400) Siberi a Kirishi — Chudovo 1500 400 Northwes t Sredneuralsk — Sverdlovsk 1500 1000 Ural s

Note : Line capacities in parentheses are for the planned lines o f 1150 KVA .

1 4 4

Table 1 8

POWER TRANSMISSIONS AMONG THE GRID SYSTEM S (MW per hour)

Annua l Grid Exports Imports Net Billion KW H

Center 1500 3143 -1643 -14 . 4 Volga 402 481 -79 — . 7 Urals 1923 2746 -823 -7 . 2 Northwest 2139 1680 459 4 . 0 South 804 585 219 1 . 9

N . Caucasus . 879 508 371 3 . 2 Transcaucasus 486 294 192 1 . 7 N . Kazakhstan 3829 3253 576 5 . 0 Siberia 2411 1143 1268 11 . 1

Source : Data compiled from flows shown in Figure 1 .

145 Section VI . REFERENCE S

Campbell, 1980 : Robert W . Campbell . Soviet Energy Technology : Planning, Policy, Research and Development (Bloomington : Indiana University Press, 1980) .

Campbell, 1983 : Robert W . Campbell . "Energy, " in Abram Bergso n and Herbert S . Levine (eds .) . The Soviet Economy : Towar d the Year 2000 (London : Allen and Unwin, 1983), pp . 191—217 .

Danilov et al ., 1983 : A . D . Danilov et al . Ekonomicheskay a geografiya SSSR (Moscow : Vysshaya shkola, 1983) .

Dienes and Shabad, 1979 : Leslie Dienes and Theodore Shabad . The Soviet Energy System : Resource Use and Policie s (Washington, D .C . : Winston and Sons, 1979) .

Green and Mitchelson, 1981 : Milford B . Green and Ronald L . Mitchelson . "Spatial Perspective of the Flows through th e Southeast Electrical Transmission Network," Th e Professional Geographer, Vol . 33, no . 1 (February 1981) , pp . 83-94 .

Huzinec, 1978 : George Huzinec . "The Impact of Industria l Decision—Making upon the Soviet Urban Hierarchy, " Urba n Studies, Vol . 15, no . 2 (June 1978), pp . 139—1 6 8 .

JPRS, 1982 : "Map of USSR Electric Power Stations," in Join t Publications Research Service . Soviet Union : Energy , JPRS L/10822, 22 September 1982 .

Kaz . Pravda, 1983 : Kazakhstanskaya Pravda, 25 December 1983 , p . 1 .

Nekrasov and Pervukhin, 1977 : A . M . Nekrasov and M . G . Pervukhin . Energetika SSSR v 1976—1980 godakh (Moscow : Energiya , 1977) .

Nekrasov and Troitskiy, 1981 : A . M . Nekrasov and A . A . Troitskiy . Energetika SSSR v 1981—1985 godakh (Moscow : Enerogizdat, 1981) .

1 4 6

Neporozhniy, 1980 : P . S . Neporozhniy . 60 let Leninskogo plan a GOELRO (Moscow : Energiya, 1980) .

"News Notes," SG- .. Theodore Shabad . "News Notes," Sovie t Geography : Review and Translation : Vol . 21, no . 3 (March 1980), p . 19 0 Vol . 24, no . 3 (March 1983), pp . 248-25 6 Vol . 25, no . 4 (April 1984), pp . 290-29 1

Runova, 1976 : T . G . Runova . "The Location of the Natura l Resource Potential of the USSR in Relation to the Geograph y of Productive Forces," Soviet Geography : Review an d Translation, Vol . 17, no . 2 (February 1976), pp . 73-85 .

Ryl'skiy, 1981 : Vrazvitiya. A . Ryl ' skiy . Regional'niye problem y energetika i elektrifikatsii SSSR (Moscow : Ekonomika , 1981) .

Sagers and Green, 1982 : Matthew J . Sagers and Milford B . Green . " Spatial Efficiency in Soviet Electrical Transmission, " Geographical Review, Vol . 72, no . 3 (July 1982), pp . 291-303 .

Vernikov, 1982 : V . Vernikov . Transport energiy (Moscow : Znaniye , 1982) .

Vneshtorg 19-- : Ministerstvo vneshney torgovli SSSR . Vneshnay a torgovlya SSSR za 19-- god, statisticheskiy obzor (Moscow : Mezhdunarodnyye otnosheniya, 19--) .

Voloboy and Popovkin, 1972 : P . V . Voloboy and V . A . Popovkin . Problemy territorial'noy spetsializatsii i kompleksnog o rozvitku narodnogo gospodarstva Ukrainskoy RSR (Kiev : Naukova dumka, 1972) .

1 4 7 VII . SUMMAR Y

Soviet energy resources are the largest in the world, ye t

energy problems have not bypassed the USSR . A major aspect o f

current Soviet energy difficulties is the problem of transporting

energy . This is because of the USSR ' s large size and the spatial ,

disparity between energy resources and demand . Transportation ha s

become an increasingly important problem as production has shifte d

eastward, while consumption has remained concentrated in th e

western "European" portion .

This study is an attempt to analyze the transportation o f

Soviet energy resources . The purpose has been to determine th e

general pattern of movement for each of the main forms of energy

(gas, crude petroleum, refined products, coal, and electricity) ,

to identify constraints in the transportation system that inhibi t

efficient flows, and to evaluate the prospects for futur e

developments, based upon the analysis of the system .

To accomplish this, each energy—transportation system has bee n modeled as an abstract, capacitated network consisting of suppl y nodes (production sites), demand nodes (consumption sites), an d

bounded arcs (transport linkages) . The essential characteristic s of each are supply availabilities (production), demand level s

(consumption), and transport capacity, respectively . The optima l

1 4 8

flows and associated costs for each network are determined b y

applying the out-of-kilter algorithm, a network allocation model ,

to each abstracted system . This was done for each network usin g

1980 as the base year .

In general, the models provide justification for the post-198 0

developments in each system . Often these developments appear a s

solutions to the bottlenecks and transport problems identified i n

the analysis . Thus overall, the current Soviet energy program

seems to be a rational response to existing problems . The model s

indicate that Soviet development plans in the fuels industries ar e

rational, with the distribution and movement patterns approachin g

optimum efficiency . The major findings and speculations of th e

study that result from this exercise are summarized below for eac h

of the systems .

Natural gas has the leading role in the Soviet energ y

program, with a 45% increase in output planned between 1980 an d

1985 . Because increments in gas output are not constrained by

reserves, gas production could be increased considerably in a

relatively short period of time . The transport constraint for th e

gas industry, resulting from the location of the reserves i n

northern Tyuman' Oblast, was lessened by the concentration of th e

gas in such a small area . Gas flows were modeled for 1970, 1975 ,

1980, and 1985 because of the considerable changes in the ga s

system . The modeled flows closely replicate those actuall y

existing in the Soviet system, implying that the Soviet gas syste m

1 4 9 is operating near optimum efficiency . Our models of the Sovie t gas network indicate that it became successively more congeste d between 1970 and 1980, consonant with the maturation of the Sovie t gas industry . The major constraint in the pipeline system in 198 0 was in the main line from West Siberia, with other major bottle — necks along the Northern Lights route, at the main distributio n points of Ostrogozhsk and Novopskov (located south of Moscow), an d

in the lines to the Transcaucasus . Subsequent pipeline developments in the 11th FYP for the gas network alleviate thes e constraints, indicating that their construction was warranted .

A scenario for 1985, incorporating five major new lines, whil e

increasing supply and demand at several key nodes, shows a n

improvement in the overall efficiency of the distribution network , as the most serious constraints in the system are alleviated .

This confirms the view that additional pipeline construction i s necessary for the success of the gas plans . Also, the rathe r

significant increase in gas exports contemplated between 1980 an d

1985, including those to Western Europe, does not particularly ta x

the gas system with the additional lines installed .

Petroleum is the most transportable of the fossil fuels, so i t

is not surprising that it was the first of Siberia's energ y

resources to be developed for widespread use in the European USSR .

In the transportation of crude petroleum, the hypothetical flo w patterns generated by the model in 1980 generally agree with wha t

little is known about actual flows, implying that the petroleu m

1 5 0 network also is operating efficiently . The major constraints i n

the system in 1980 were in the European USSR, particularly in th e

older oil—producing regions in the Caucasus, rather than in th e

east at the origin of most of the USSR's petroleum . This proble m

has been alleviated to a considerable extent by the constructio n

of additional pipelines in the region since, so again the mode l

correctly anticipates subsequent developments . In particular, th e

new Surgut—Novopolotsk pipeline greatly increases the efficienc y

of petroleum transmission . The model shows the pipelines fro m

West Siberia to the European USSR to be operating close t o

capacity in 1980 . This demonstrates why a new pipeline from Wes t

Siberia to the European USSR (between Kholmogory and Klin) i s

being constructed, although relatively little output growth i s

anticipated for West Siberia in the 11th FYP . Thus the problem s

of realignments in supply patterns necessitated by the decline o f production in the older producing regions has been largel y overcome .

In contrast, the movement of refined products is relativel y

inefficient . About twice as many ton—kilometers as necessary ar e generated in distributing refined products in the USSR, primaril y because of the mismatch among the various products between loca l consumption needs and refinery output mix . This implies tha t

Soviet planning is adequate for transporting homogeneou s commodities in unique transportation systems (e .g ., gas, crud e petroleum, electricity), as their distribution is relativel y

1 5 1 efficient, but does not perform very well with the complexity o f heterogeneous products on common carriers . Another problem i s that the distribution of refining capacity is a reflection of th e past, when different supply and demand factors were operating . A second simulation of refined product flows, incorporating th e refineries planned for completion in the 11th FYP, indicates tha t these locations are generally justified . Thus problems in th e distribution of refining capacity are being gradually rectified .

Beyond this, the model indicates that the most likely areas fo r future refinery construction are the western Ukraine and the Fa r

East .

The simulation of Soviet coal flows explains and justifie s post—1980 plans for the coal sector, mainly in the development o f a coal—by—wire approach for the lower quality coal of some easter n coal basins . This is because the model generates a massiv e movement of coal from the east at volumes that must be strainin g railroad facilities to the limit . The model also indicates tha t further expansion of production at Ekibastuz appears warranted .

However, this is not possible without more transport capacity .

This dilemma appears to be resolved in the Soviet plans to expan d production at Ekibastuz, using the fuel to power mine—mout h generating stations and transmit the energy to the Urals an d central Russia in the form of electricity with extra-high—voltag e electrical lines . An alternative solution to the transpor t problem that also is supported by the results of the model is th e

1 5 2 conversion of the Central Siberian rail line into a specialize d coal carrier to transport the higher quality Kuznets coal to th e

European USSR ,

The model of the Soviet electrical system indicates that it i s operating under far more strain than in 1975 . A higher percentag e of arcs are capacitated, and the problem proves to be infeasibl e without adjusting for greater dispersion of consumption an d including some planned extra—high—voltage lines as if they wer e operational . The main problem in the Soviet electrical network i s the lack of transmission capacity, particularly in the Ural s region . As a result, the model demonstrates the definite need fo r the planned EHV network of 1150 KVA lines in the Siberia —

Kazakhstan—Urals region, since these arcs are heavily utilized i n the model . In contrast, a simulation incorporating the planne d

1500 KVA (DC) line from Ekibastuz to the Center indicates that th e project does not appear justified because of very limite d utilization and perverse flow patterns on some of the added arcs .

Therefore, subject to limitations of the data and the models , the Soviet energy program as outlined in the 11th FYP appears t o be a rational response to the problems existing in their energ y system in 1980, as well as the opportunities available . Given th e transport constraints identified in the flow models, curren t developments usually appear as ways to alleviate these obstacle s or bottlenecks .

1 5 3 In terms of areas for future research and possibl e

improvements to the study, a number of suggestions are offered .

One area that needs improvement is in transport costs . Our model s

incorporated very simplistic cost functions ; i .e ., cost varie d

linearly with distance . It is believed that some data ar e

available on transport costs, although these data are scattere d

throughout the literature . Work is continuing on this particula r

facet . Another major shortcoming of this study is the lack o f

appropriate capacities for arcs representing railroads . Th e

problem is very important and needs to be addressed, but eve n

conceptual aspects of the problem are subject to question . Fo r

example, judging from the press, the availability of cars appear s

to be the major constraint in railroad transportation, rather tha n

line or other facilities such as motive power and terminals . *

However, the situation is very murky, particularly given the focu s

of this study upon individual stretches of line rather than in th e

aggregate . It would also be helpful in the future to pay mor e

attention to the installation of compressor and pumping station s

on the gas and oil pipelines to better account for pipelin e

capacities along specific arcs .

*See Holland Hunter and Deborah A . Kaple, "The Soviet Railroa d Situation," Working Paper No . 4 (Wharton Econometrics Forecastin g Associates, Inc ., September 1983) .

1 5 4 Another area in which the study could be improved would be a simultaneous solution for the distribution of crude petroleum an d refined products, rather than separately . This can be don e relatively easily by linking the two networks into a single model , an approach which would be far more realistic than that take n here .

Finally, the estimates on the regional distribution of coa l consumption by other consumers could be improved b y working from regional estimates of total coal deliveries for disaggregation t o individual nodes . The method utilized for distributing consumption among the nodes turned out to be a major source of inaccurac y in the model .

However, overall the models provide some very interestin g insights on the transportation of Soviet energy resources .

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