This paper introduces a tool to analyze the future developments of the international steam coal market, the "COALMOD-World" model. Steam coal is a major fuel for electricity generation today and its use is expected to grow dramatically in the coming decades, despite the potential negative external effect on the climate through the CO₂ emissions.

In tandem with the growth of global coal usage, the volume of the international trade coal market has been increasing in recent years. This trend is expected to continue, and an increasing global trade means that many countries will rely on imports. Identifying how the trade flows will develop and where steam coal will come from in the future - a primary purpose of the model - can help us better assess possible energy security issues.

The combination of model theory and detailed market analysis provides the ground for the development and the implementation of the model.  The model setup follows the organization of the value-added chain of the steam coal sector. The value chain is complex and there are various types of players involved at each stage. Producers can be large national and sometimes state-owned companies. There are a few large multinational coal companies but also many smaller companies, usually operating in one country only. Transport infrastructure can be built by the mining company or by another entity. Often, it consists of rail infrastructure but in some countries trucks or river barges are used. Export ports can be dedicated to one company or be operated by another company. Traders as intermediaries also play a role as they can be vertically integrated or contractually connected to every stage of the industry. This modeling framework allows for detailed analysis of how the global coal trade may evolve in the coming decades.

Nigeria depends heavily on oil and gas, with hydrocarbon activities providing around 65 percent of total government revenue and 95 percent of export revenues.  While Nigeria supplies some LNG to world markets and is starting to export a small amount of gas to Ghana via pipeline, the great majority of the country's hydrocarbon earnings come from oil.  In 2008, Nigeria was the 5^th largest oil exporter and 10^th largest holder of proved oil reserves in the world according to the U.S. Energy Information Administration.  The country's national oil company NNPC (Nigerian National Petroleum Corporation) sits at the nexus between the many interests in Nigeria that seek a stake in the country's oil riches, the government, and the private companies that actually operate the vast majority of oil and gas projects.

Through its many divisions and subsidiaries, NNPC serves as an oil sector regulator, a buyer and seller of oil and petroleum products, a technical operator of hydrocarbon activities on a limited basis, and a service provider to the Nigerian oil sector.  With isolated exceptions, NNPC is not very effective at performing its various oil sector jobs.  It is neither a competent oil company nor an efficient regulator for the sector.   Managers of NNPC's constituent units, lacking the ability to reliably fund themselves, are robbed of business autonomy and the chance to develop capability.  There are few incentives for NNPC employees to be entrepreneurial for the company's benefit and many incentives for private action and corruption.  It is no accident that NNPC operations are disproportionately concentrated on oil marketing and downstream functions, which offer the best opportunities for private benefit.  The few parts of NNPC that actually add value, like engineering design subsidiary NETCO, tend to be removed from large financial flows and the patronage opportunities they bring. 

Although NNPC performs poorly as an instrument for maximizing long-term oil revenue for the state, it actually functions well as an instrument of patronage, which helps to explain its durability.  Each additional transaction generated by its profuse bureaucracy provides an opportunity for well-connected individuals to profit by being the gatekeepers whose approval must be secured, especially in contracting processes.  NNPC's role as distributor of licenses for export of crude oil and import of refined products also helps make it a locus for patronage activities.  Corruption, bureaucracy, and non-market pricing regimes for oil sales all reinforce each other in a dysfunctional equilibrium that has proved difficult to dislodge despite repeated efforts at oil sector reform.

In 2009 the global coal market witnessed one of the most dramatic realignments it has ever seen - China, long a net exporter of coal, suddenly imported a record-smashing 126 Mt tons (103 Mt net). This inversion of China's role in global coal markets meant that Chinese imports accounted for nearly 15% of all globally traded coal, and China became the focal point of global demand as traditional import markets like Europe and Japan stagnated in the wake of the financial crisis.  The middle kingdom's appetite for imported coal seems insatiable, and the "China Factor" appears to have ushered in a new paradigm for the global coal market.

But China doesn't "need" the coal.  The world's largest coal producer cranked out 2.96 Bt of production in 2009, backed up by 114.5 Bt of reserves.  While the world's other fastest growing importer, India, is plagued by a growing gap between coal supply and power demand that it is unable to fill domestically, this is not the case in China.  The spike in Chinese demand for imported coal is therefore a more complex (and less easily predictable) phenomenon that requires careful examination if the world is to understand what impact China might have on global energy markets in the coming decade.

In this paper Richard Morse and Gang He devise a model that explains Chinese coal import patterns and that can allow the coal market to understand, and to some degree predict, China's coal import behavior.  They argue that the unique structure of the Chinese coal market creates a series of key arbitrage relationships between Chinese domestic coal markets and international coal markets that determine Chinese import patterns.

The implications of this argument are significant for the development of the global coal trade in the coming decade.  The arbitrage relationships that Morse and He describe directly link the domestic price of coal in China to the global price of coal. Developments in China's domestic coal market will be a dominant factor determining global coal prices and trade flows (and by implication power prices in many regions).  This makes understanding the domestic Chinese coal market, which operates according to a unique economic and political logic, crucial for any participant in the global markets.

The state-owned company Oil and Natural Gas Corporation Limited (ONGC) is India's largest company devoted to exploration and production (E&P). This paper attempts to unpack the dynamic of the government-ONGC relationship. Focusing specifically on how government ownership and control has influenced ONGC's performance and strategy, this paper makes four main arguments.

First, ONGC exists, just as with national oil companies in many other countries, because of a legacy of suspicion about outsiders.  It performed well when it was tasked with things that were not that difficult and when it had help for the more difficult ventures, such as frontier E&P and development.

Second, ONGC has run into trouble as it matured, and the roots of its troubles are mainly in its interactions with the GoI and secondarily in its management.

Third, a slew of reforms instituted since the mid 1990s have fundamentally changed the landscape of the E&P sector in India and the dynamic of government-ONGC relationship. Targeted at improving corporate governance, enhancing competition in E&P, and eliminating price controls, those reforms have had a mixed impact on ONGC's performance and strategy. They also highlight the difficulties the government has had in encouraging higher efficiencies in ONGC and the oil and gas sector.

Fourth, given the deep interconnects of the oil and gas sector with India's political economy, fixing the oil and gas sector essentially entails fixing the larger political economy within which the sector is embedded.