  A model is presented in this work for simulating endogenously the evolution
of the marginal costs of production of energy carriers from non-renewable
resources, their consumption, depletion pathways and timescales. Such marginal
costs can be used to simulate the long term average price formation of energy
commodities. Drawing on previous work where a global database of energy
resource economic potentials was constructed, this work uses cost distributions
of non-renewable resources in order to evaluate global flows of energy
commodities. A mathematical framework is given to calculate endogenous flows of
energy resources given an exogenous commodity price path. This framework can be
used in reverse in order to calculate an exogenous marginal cost of production
of energy carriers given an exogenous carrier demand. Using rigid price
inelastic assumptions independent of the economy, these two approaches generate
limiting scenarios that depict extreme use of natural resources. This is useful
to characterise the current state and possible uses of remaining non-renewable
resources such as fossil fuels and natural uranium. The theory is however
designed for use within economic or technology models that allow technology
substitutions. In this work, it is implemented in the global power sector model
FTT:Power. Policy implications are given.
