The computation of energy production (ENP) is considerably easier than that of gross sectoral production in the economic model or of agricultural production in the agricultural model.  Only capital is considered important as a factor of production (not labor, land, or even weather).  Energy production is initially estimated by dividing the quotient of capital in each energy category (ken) and the appropriate capital-to-output ratio (QE).  A multiplier, enpm , can be used to increase or decrease production.  This yields:

The dynamics of the capital-to-output ratios, QE, are discussed in this section.

Known reserves (RESER) and exogenously specified maximums pose constraints on production of certain energy types.  The affected energy types are oil, gas, coal, and hydro.  The impact of reserves is felt via a limit on the fraction of reserves that can be produce in any year. Specifically, the reserve-to-production ratio may not fall below the value of prodtf , which is initially set in the pre-processor, but can be overridden by the user.  In addition, as the actual reserve-to-production ratio approaches this limit, its rate of decrease is limited.  The exogenously specified maximums apply only to oil, gas, and coal, and are given by the parameters enpoilmax , enpgasmax , and enpcoalmax .  This yields a second estimate for energy production, given as:

where

• e only applies to oil, gas, coal, and hydro
• enpmax takes on the value enpoilmax , enpgasmax , and enpcoalmax ,depending upon the fuel.
• sResProdR is the reserve-to-production ratio from the previous year; this limit only takes effect when sResProdR falls below 30 and remains above prodtf

IFs then selects the minimum of ENP1 and ENP2 as the estimate of energy production ENP.  The dynamics of energy reserves are discussed in this section.

Two final adjustments are made to energy production.  The first accounts for capacity utilization, CPUTF, and the second only comes into play when a restriction is placed on energy exports.  Since these are not calculated until the calculation of energy stocks and shortages, they are described in the appropriate places in the Domestic Energy Stocks section and the Energy Prices and Final Adjustments section.