U.S. Energy Information Administration Independent Statistics & Analysis www.eia.gov

AEO2019 Review and AEO2020 Plans

For

Annual Energy Outlook 2020 PNGBA 1st Working Group

June 5, 2019 | Washington, DC

By

Dana Van Wagener, James Preciado, and Katie Dyl

Office of Petroleum, Natural Gas, and Biofuels Analysis
Oil and Gas Supply

Office of Petroleum, Natural Gas, & Biofuels Analysis DO NOT CITE OR DISTRIBUTE 2
Outline

• Evaluation and discussion of results from the Annual Energy Outlook 2019

(AEO2019)

• Review of changes to the short-term outlook

• Current plans for AEO2020

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Outline

• Evaluation and discussion of results from the Annual Energy Outlook 2019

(AEO2019) 

• Review of changes to the short-term outlook

• Current plans for AEO2020

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0

5

10

15

20

25

30

2000 2010 2020 2030 2040 2050

2018

history projections

U.S. crude oil and natural gas plant 

liquids production

million barrels per day

High Oil and Gas 

Resource and 

Technology

High Oil Price

High Economic 

Growth

Reference

Low Economic

Growth

Low Oil Price

Low Oil and Gas 

Resource and 

Technology

Reference, 

crude oil only

1970 crude oil 

production level

0

20

40

60

80

100

120

140

160

0

10

20

30

40

50

60

2000 2010 2020 2030 2040 2050

Dry natural gas production

trillion cubic feet billion cubic feet

per day 2018

history projections

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

U.S. crude oil and natural gas production are sensitive to resource 

availability and technological improvements

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0

2

4

6

8

10

12

14

16

2000 2010 2020 2030 2040 2050

tight oil

other

2018

history projections

0

20

40

60

80

100

120

0

5

10

15

20

25

30

35

40

45

50

2000 2010 2020 2030 2040 2050

2018

history projections

tight/shale gas

other

U.S. crude oil production

million barrels per day

U.S. dry natural gas production

trillion cubic feet billion cubic feet per day

Office of Petroleum, Natural Gas, and Biofuels Analysis DO NOT CITE OR DISTRIBUTE

Growth in supply from tight and shale resources continues to drive 

U.S. crude oil and natural gas production

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

6
Lower 48 onshore crude oil production by region

million barrels per day

Lower 48 onshore dry natural gas production by region

trillion cubic feet billion cubic feet per day

The Southwest region leads growth in U.S. crude oil production and 

the East region leads growth in natural gas in the Reference case

7

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

0

10

20

30

40

50

0

2

4

6

8

10

12

14

16

18

20

2000 2010 2020 2030 2040 2050

East

Gulf Coast

Southwest

Rocky Mountains 

Midcontinent

Northern Great Plains

West Coast

2018

history projections

0

1

2

3

4

5

6

2000 2010 2020 2030 2040 2050

2018

history projections

Southwest

Gulf Coast

Northern Great Plains

Rocky Mountains 

Midcontinent

East 

West Coast

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0

1

2

3

4

5

6

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

 sum of selected Permian

 Wolfcamp*

 Bakken

 other

 Eagle Ford

 Spraberry*

 Avalon/Bonespring*

 Austin Chalk

 Niobrara

 Woodford

 Monterey

U.S. tight oil production

million barrels per day

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Bakken and Wolfcamp lead growth in tight oil production

*Permian Basin

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

8

2018

history projections
0

2

4

6

8

10

12

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

 Marcellus

 Utica

 other

 Haynesville/Bossier

 Eagle Ford

 Barnett

 Fayetteville

 Woodford

 Bakken

 Antrim

U.S. dry shale gas production

trillion cubic feet

Marcellus, Utica, and Permian tight oil plays lead growth in production 

of shale gas 

Note: Other includes natural gas production in tight oil plays.

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

9

2018

history projections

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U.S. natural gas plant liquids production by region

million barrels per day

U.S. natural gas plant liquids production by fuel

million barrels per day

The East and Southwest regions lead the production of natural gas 

plant liquids in the Reference case

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

10

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

2018

history projections

East

Southwest

other

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

2018

history projections

normal butane

isobutane

propane

ethane

natural gasoline

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Outline

• Evaluation and discussion of results from the Annual Energy Outlook 2019

(AEO2019)

• Review of changes to the short-term outlook

• Current plans for AEO2020

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U.S. crude oil production by region

million barrels per day

Office of Petroleum, Natural Gas, and Biofuels Analysis DO NOT CITE OR DISTRIBUTE

EIA’s 2019 May Short-Term Energy Outlook (STEO) projects stronger 

growth in crude oil production than in the 2018 October STEO

12

2020 2025 2030 2035 2040 2045 2050

0

2

4

6

8

10

12

14

16

2017 2018 2019 2020

Southwest

Northern Great Plains

Gulf Coast

Lower Offshore

Midcontinent

Rocky Mountains

East

West Coast and Alaska

history STEO projections AEO2019 projections

2018 October STEO

2019 May STEO

Source: U.S. Energy Information Administration, Short-Term Energy Outlooks and Annual Energy Outlook 2019 Reference case
U.S. dry natural gas production by region

billion cubic feet per day (Bcf/d)

Office of Petroleum, Natural Gas, and Biofuels Analysis DO NOT CITE OR DISTRIBUTE

EIA’s 2019 May Short-Term Energy Outlook (STEO) projects stronger 

growth in natural gas production than in the 2018 October STEO

Source: U.S. Energy Information Administration, Short-Term Energy Outlooks and Annual Energy Outlook 2019 Reference case

13

2020 2025 2030 2035 2040 2045 2050

0

30

60

90

120

2017 2018 2019 2020

East

Lower Offshore

Gulf Coast

Southwest

Midcontinent

Northern Great Plains

Rocky Mountains

West Coast and Alaska

history STEO projections AEO2019 projections

2018 October STEO

2019 May STEO
Outline

• Evaluation and discussion of results from the Annual Energy Outlook 2019

(AEO2019)

• Review of changes to the short-term outlook

• Current plans for AEO2020

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Current plan for AEO2020 updates/enhancements

• Update estimated ultimate recovery (EUR) for tight and shale wells

– Expand play areas as needed

– Determine target zone for wells in the Permian Basin

• Incorporate 45Q federal tax credits for carbon capture and sequestration

• Update Alaska and Lower 48 offshore announced discoveries

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Liquid Fuels Market Module (LFMM) 

and

International Energy Module (IEM)

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Brent price, 2018 $/b

Crude oil prices are expected to be lower in the AEO2020 Reference 

case relative to AEO2019

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case and preliminary Annual Energy Outlook 2020 

Reference case

17

0

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60

80

100

120

2015 2020 2025 2030 2035 2040 2045 2050

AEO2019 Reference Case

Preliminary AEO2020 Reference Case

Includes preliminary AEO2020 results

Do not cite or distribute

Office of Petroleum, Natural Gas, and Biofuels Analysis DO NOT CITE OR DISTRIBUTE
Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

Expected updates to international petroleum market 

representation

18

• Revisit assumptions on how the 

U.S. crude oil and petroleum 

product market interacts with the 

international market

• Specifically consider how the IEO 

can potentially inform international 

crude oil supply/demand curves in 

the AEO

• Expect that there will be changes to 

crude oil imports and exports

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Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

Expected biofuel updates for AEO2020

19

• Revisit assumptions related to 

biofuel feedstock quantities and 

prices

• Use more data from EIA’s 

agricultural model (POLYSYS)

• Anticipate that using more 

POLYSYS data will lead to changes 

in ethanol prices, imports, and 

exports

• Updated RFS obligation levels to at 

least reflect 2018 rulemaking

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Other annual updates for AEO2020

• Use EIA’s new database for crude oil and petroleum product pipelines to update 

pipeline capacities in LFMM

• Update U.S. refinery capacity based on the Petroleum Supply Annual

• Update state taxes for gasoline, diesel, and jet fuel

• Consider new distribution cost markups for gasoline, diesel, and jet fuel based on 

price data from EIA and public sources

• Adjust refinery fuel consumption (such as cat coke, still gas, natural gas) to better 

match historical levels

• Continue to monitor developments in marine fuel markets related to the International 

Maritime Organization’s (IMO) 2020 sulfur limit and adjust our model assumptions 

accordingly.

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Natural Gas Market Module (NGMM) 

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Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

U.S. natural gas consumption and production increase in most cases with 

production growth outpacing natural gas consumption in all cases

22

0

20

40

60

80

100

120

140

160

0

10

20

30

40

50

60

2000 2010 2020 2030 2040 2050

Dry natural gas production

trillion cubic feet billion cubic feet per day

2018

history projections High Oil and 

Gas Resource 

and Technology

High Oil Price

High Economic 

Growth

Reference

Low Economic

Growth

Low Oil Price

Low Oil and 

Gas Resource 

and Technology

0

20

40

60

80

100

120

140

160

0

10

20

30

40

50

60

2000 2010 2020 2030 2040 2050

Natural gas consumption

trillion cubic feet

2018

history projections

billion cubic feet per day

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0

1

2

3

4

5

6

7

8

9

2010 2020 2030 2040 2050

Natural gas price at Henry Hub

2018 dollars per million British thermal unit

2018

history projections

Low Oil and Gas 

Resource and 

Technology

High Oil Price

Reference

Low Oil Price

High Oil and Gas 

Resource and 

Technology

Office of Petroleum, Natural Gas, and Biofuels Analysis DO NOT CITE OR DISTRIBUTE

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

Oil and natural gas prices are affected by assumptions about international 

supply and demand and the development of U.S. shale resources 

23

0

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60

80

100

120

140

160

0

10

20

30

40

50

60

2000 2010 2020 2030 2040 2050

Dry natural gas production

trillion cubic feet billion cubic feet per day

2018

history projections High Oil and 

Gas Resource 

and Technology

High Oil Price

Reference

Low Oil Price

Low Oil and 

Gas Resource 

and Technology
-14

-7

0

7

14

21

28

-5

0

5

10

2000 2010 2020 2030 2040 2050

2018

history projections

liquefied natural 

gas (LNG) 

exports

pipeline exports to 

Mexico

Canada

pipeline imports from

Canada

LNG imports

Natural gas trade (Reference case)

trillion cubic feet billion cubic feet per day

U.S. net exports of natural gas continue to grow in the Reference case, 

led by growth in LNG exports to overseas markets

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

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0

5

10

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20

25

30

35

0

2

4

6

8

10

12

2000 2010 2020 2030 2040 2050

Liquefied natural gas exports

trillion cubic feet

2018

history projections

billion cubic feet per day

High Oil

Price

High Oil and 

Gas 

Resource 

and 

Technology

Reference

Low Oil and 

Gas 

Resource 

and 

Technology

Low Oil

Price 0

1

2

3

4

5

6

7

8

9

2000 2010 2020 2030 2040 2050

Brent crude oil price to Henry Hub 

natural gas price ratio

energy-equivalent terms

2018

history projections

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

AEO2019 projected 14 Bcf/d of LNG exports in 2030 in Reference 

case

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LNG export assumptions are being reevaluated

• Dates of projects under construction in AEO 2019 updated

• New projects receiving FID are assumed to be built

– Golden Pass LNG (February 2019): 3 trains, 2.04 Bcf/d, 2024-2025

– Sabine Pass Train 6 (June 2019): 0.7 Bcfd, 2023

– Calcasieu Pass (construction, no FID): 10 trains, 1.32 Bcf/d, 2023-2024

26

Assumption AEO2019 AEO2020

Phase-in Years 3 2

Utilization Year 1 33% 50%

Utilization Year 2 67% 90%

Maximum trains per year 3 3

Years to build 4 4

% Liquefaction fuel 10% 10%

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Source: Electricity Market Module documentation, AEO2020 Electricity Working Group 1

Electricity Market Module regionality changes are expected to result in changes to 

regional natural gas use in power generation/improved convergence

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Planned changes in the regional mapping between EMM and NGMM

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• Realign Mountain region states - source of convergence issues

• Realign South Atlantic region states to match more closely with NERC-based regions

• Realign Southeast/Gulf Coast states to NERC-based regions, not Census divisions

AEO2019 NGEMM regions

Proposed AEO2020 NGEMM regions
0

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12

14

16

2010 2015 2020 2025 2030 2035 2040 2045 2050

Natural gas delivered end-use prices by sector (Reference case) 

2018 dollars per thousand cubic feet

Delivered end-use natural gas price markups to be reevaluated, 

accounting for projected regional population and climate

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019 Reference case

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residential

electric power

industrial

commercial

From Macroeconomic Model 

and Buildings team:

‒ HDDs

‒ CDDs

‒ population

Henry Hub
Expectations of changes and additional model developments

• LNG export assumptions: Expectation of higher LNG exports

• Electricity Market Module incorporating new regions into AEO2020; impacts 

unknown at this point, but changes are expected in terms of regional natural 

gas use in power generation

• Delivered end-use natural gas price updates: Some regional changes, but 

minimal impact at national, annual level

• Model calibration efforts are still ongoing; any impacts are expected to be at 

the regional level (state-to-state monthly flows)

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We welcome feedback on our assumptions and documentation

• Working group meetings http://www.eia.gov/forecasts/aeo/workinggroup/

• The AEO Assumptions report http://www.eia.gov/forecasts/aeo/assumptions/

• NEMS model documentation

– Oil and gas supply (OGSM) 

https://www.eia.gov/outlooks/aeo/nems/documentation/ogsm/pdf/m063(2018).pdf

– Liquid Fuels Market Module (LFMM) 

https://www.eia.gov/outlooks/aeo/nems/documentation/lfmm/pdf/m059(2018).pdf

– International Energy Module (IEM) 

https://www.eia.gov/outlooks/aeo/nems/documentation/international/pdf/m071(2018).pdf

– Natural Gas Market Module (NGMM) 

https://www.eia.gov/outlooks/aeo/nems/documentation/ngmm/pdf/ngmm(2018).pdf

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For more information

U.S. Energy Information Administration home page | www.eia.gov

Annual Energy Outlook | www.eia.gov/forecasts/aeo

Short-Term Energy Outlook | www.eia.gov/forecasts/steo

International Energy Outlook | www.eia.gov/forecasts/ieo

Today In Energy | www.eia.gov/todayinenergy

Monthly Energy Review | www.eia.gov/totalenergy/data/monthly

State Energy Portal | www.eia.gov/state

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0

20

40

60

80

100

0

5

10

15

20

25

30

35

40

2000 2010 2020 2030 2040 2050

2018

history projections

residential

electric power

industrial

liquifaction

lease and plant

other

commercial

transportation

Natural gas consumption by sector (Reference case) 

trillion cubic feet billion cubic feet per day

The industrial sector, followed by the electric power sector, drives U.S. 

natural gas consumption growth

Source: U.S. Energy Information Administration, Annual Energy Outlook 2019

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