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

Annual Energy Outlook 2022 Working Group

AEO2021 Review and AEO2022 Plans

for

Oil and Gas Supply, Natural Gas Markets, & Liquid Fuels Markets Working Group

May 25, 2021 | Washington, DC

By

Petroleum & Natural Gas Modeling Team

Office of Long-Term Energy Modeling 
Assumptions

• Current laws and regulations as of September 2020 remain unchanged

• Current views on economic and demographic trends as well as technology improvements (evolutionary 

not revolutionary)

• Compound annual growth rate for real U.S. GDP is 2.1% (Reference case)

– High Economic Growth case (2.6%) and Low Economic Growth case (1.6%) 

• The Brent crude oil price by 2050 is $95 per barrel (b) in constant 2020 dollars (Reference case)

– High Oil Price case ($173/b) and Low Oil Price case ($48/b) 

• Oil and natural gas supply cases

– High: more accessible resources and lower extraction technology costs than the Reference case

– Low: fewer accessible resources and higher extraction technology costs than the Reference case

• Renewables cost cases

– High: no cost reductions in renewable technologies

– Low: renewables achieve 40% lower overnight capital costs by 2050 compared with Reference case

AEO2021 examines a range of conditions from 2020 to 2050

2
Oil and natural gas supply

3
• Overview of U.S. crude oil and dry natural gas production and prices in the 

AEO2021

• Planned updates for AEO2022

• Recent laws and executive orders that affect oil and natural gas 

development

• Assumptions and questions to evaluate

Agenda

4
$0

$20

$40

$60

$80

$100

$120

2010 2020 2030 2040 2050

2020

history projections

U.S. crude oil production

AEO2021 Reference case

million barrels per day

Crude oil production and prices

5

0

5

10

15

20

25

2010 2020 2030 2040 2050

2020

history projections

West Texas Intermediate spot price

AEO2021 Reference case

2020 dollars per barrel
0

5

10

15

20

25

30

35

40

45

50

2000 2010 2020 2030 2040 2050

2020

history projections

$0

$2

$4

$6

$8

$10

$12

2000 2010 2020 2030 2040 2050

2020

history projections

U.S. dry natural gas production

AEO2021 Reference case

trillion cubic feet

Natural gas spot price at Henry Hub

AEO2021 Reference case

2020 dollars per million British thermal units

Natural gas production and prices

6
• Data updates

– Tight/shale estimated ultimate recovery (EUR) per well 

– Lower 48 states offshore and Alaska announced discoveries

– Historical production through 2020 and estimated for 2021

– Natural gas plant liquids (NGPL) factors for plays in the Denver/Jules Basin

– Short-Term Energy Outlook (STEO) calibration

• Model improvements (if time allows)

– Split onshore Lower 48 states production into federal versus non-federal

Planned oil and natural gas supply updates

7
• Revision to oil and natural gas permitting rules in Colorado

– Increased drilling setbacks from homes and business from 500 feet to 2,000 feet

– Applies to new permit applications and still-pending applications submitted under the previous 

rules—does not affect approved permits

– AEO2022 change: 

• Reduce the acreage that can be drilled and/or increase average lateral length—how much?

• Pause on leasing of federal lands and waters

– Four planned lease sales for March have been postponed (Colorado, Montana, Nevada, and Utah) 

– Seven lease sales are pending for June through December (Colorado, Montana, and Nevada) as of 

May 11

– AEO2022 change: 

• If short-term pause, then no change to accessibility to federal lands/waters

• If long-term pause, then limit accessibility to federal lands/waters not currently leased—

requires splitting federal lands into leased and non-leased in the model. We will not be able to 

represent unleased federal minerals areas

Recent laws and executive orders that affect oil and natural gas 

development

8
• Given current laws and regulations, what other considerations would affect 

the development of U.S. crude oil?

• What developments in natural gas plant liquids production are not being 

captured?

• In the AEO2021, increased production in the Appalachian Basin primarily 

drives the growth in dry natural gas production. What are potential 

impediments to this projected production growth?

• What concerns exist about the projected growth in dry natural gas 

production from oil formations, particularly in the Permian Basin (Southwest 

region)?

Assumptions and questions to evaluate for AEO2022

9
0

2

4

6

8

10

12

14

16

2019 2020 2021 2022

U.S. crude oil production by region

million barrels per day

Comparison of STEO and AEO2021 crude oil production

10

2022 2027 2032 2037 2042 2047

Southwest

Northern Great Plains

Gulf Coast

Lower Offshore

Midcontinent

Rocky Mountains

East

West Coast and Alaska

history STEO forecast AEO2021 Reference case

2020 October STEO

2021 May STEO

Source: U.S. Energy Information Administration, Short-Term Energy Outlooks (STEO) and Annual Energy Outlook 2021 (AEO2021) Reference case

2019 October STEO
• Given current laws and regulations, what other considerations would affect 

the development of U.S. crude oil?

• What developments in natural gas plant liquids production are not being 

captured?

• In the AEO2021, increased production in the Appalachian Basin primarily 

drives the growth in dry natural gas production. What are potential 

impediments to this projected production growth?

• What concerns exist about the projected growth in dry natural gas 

production from oil formations, particularly in the Permian Basin (Southwest 

region)?

Assumptions and questions to evaluate for AEO2022

11
Natural gas plant liquids (NGPL) production by region and type

12

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

2020

history projections

normal butane

isobutane

propane

ethane

natural gasoline

U.S. NGPL production by type

AEO2021 Reference case

million barrels per day

0

1

2

3

4

5

6

7

2000 2010 2020 2030 2040 2050

2020

history projections

East

Southwest

rest of United

States

U.S. NGPL production by region 

AEO2021 Reference case

million barrels per day
• Given current laws and regulations, what other considerations would affect 

the development of U.S. crude oil?

• What developments in natural gas plant liquids production are not being 

captured?

• In the AEO2021, increased production in the Appalachian Basin primarily 

drives the growth in dry natural gas production. What are potential 

impediments to this projected production growth?

• What concerns exist about the projected growth in dry natural gas 

production from oil formations, particularly in the Permian Basin (Southwest 

region)?

Assumptions and questions to evaluate for AEO2022

13
0

30

60

90

120

2019 2020 2021 2022

U.S. dry natural gas production by region

billion cubic feet per day (Bcf/d)

Comparison of STEO and AEO2021 dry natural gas production

Source: U.S. Energy Information Administration, Short-Term Energy Outlooks (STEO) and Annual Energy Outlook 2021 (AEO2021) Reference case

14

2023 2028 2033 2038 2043 2048

East

Southwest

Gulf Coast

Lower Offshore

Midcontinent

Northern Great Plains

Rocky Mountains

West Coast and Alaska

history STEO forecast AEO2021 Reference case

2020 October STEO

2021 May STEO 2019 October STEO
• Given current laws and regulations, what other considerations would affect 

the development of U.S. crude oil?

• What developments in natural gas plant liquids production are not being 

captured?

• In the AEO2021, increased production in the Appalachian Basin primarily 

drives the growth in dry natural gas production. What are potential 

impediments to this projected production growth?

• What concerns exist about the projected growth in dry natural gas 

production from oil formations, particularly in the Permian Basin (Southwest 

region)?

Assumptions and questions to evaluate for AEO2022

15
U.S. production of natural gas from oil formations

16

0

2

4

6

8

10

12

14

2010 2020 2030 2040 2050

2020

history projections

Southwest

Gulf Coast

other

U.S. dry natural gas production from oil formations by region 

AEO2021 Reference case

trillion cubic feet
• Given current laws and regulations, what other considerations would affect 

the development of U.S. crude oil?

• What developments in natural gas plant liquids production are not being 

captured?

• In the AEO2021, increased production in the Appalachian Basin primarily 

drives the growth in dry natural gas production. What are potential 

impediments to this projected production growth?

• What concerns exist about the projected growth in dry natural gas 

production from oil formations, particularly in the Permian Basin (Southwest 

region)?

Assumptions and questions to evaluate for AEO2022:

oil and natural gas supply

17
Liquid fuels markets

18
Agenda

• Key data updates planned

– Liquid Fuels Market Module (LFMM)

– International Energy Module (IEM) 

• Assumptions and questions to evaluate

• Recent events in the liquid fuels markets

19
Planned data updates for AEO2022

• LFMM: key data updates planned

– Renewable Fuels Standard (RFS) mandate levels

– Refinery and biofuels capacity (existing and planned)

– Liquid fuels pipeline capacity (existing and planned)

– Historical and STEO data

• IEM: key data updates once world oil price path projection is set

– International crude oil supply curves

– Crude oil price differentials for all 10 crude oil types traded in LFMM

– U.S. petroleum products export and import curves

20
Planned changes to RFS mandates

• RFS mandates defined for AEO2022

– Will use STEO estimate for renewable volume obligations (RVOs) for years 2021 and 2022

• This decision may change if the U.S. Environmental Protection Agency (EPA) releases 

its final RVO for 2021 (delayed) and 2022 in time

– Will maintain approach for reducing RVOs to reflect the biogas accounting not modeled in 

the LFMM

– Will flat-line mandates at 2022 levels throughout projection years

– Will adjust impact of small refinery exemptions (SRE) in line with current EPA position

• Expected impacts

– No significant impacts expected for E85 levels and ethanol volumes in gasoline

– No significant impacts expected for biodiesel production

– May impact renewable diesel blends in California market

21
Planned changes to RFS mandates in LFMM are small 

22

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case (ref2021/d113020a)

0

5

10

15

20

25

2020 2025 2030 2035 2040 2045 2050

RFS total mandate

billion credits 

0

1

2

3

4

5

6

7

8

2020 2025 2030 2035 2040 2045 2050

preliminary AEO2022 Reference case

AEO2021 Reference case

RFS advanced, cellulosic, BBD mandates

billion credits

advanced

biomassbased

diesel (BBD)*

cellulosic

* biomass-based diesel = biodiesel + renewable diesel. See https://www.eia.gov/survey/form/eia_819/glossary.pdf for glossary of all renewable fuel terms
Assumptions and questions to evaluate for AEO2022

• What percentage of domestic production of light crude oil is expected to be 

exported? Will it be balanced by heavy crude imports?

• Will refinery utilization continue to be high and balanced by product exports?

• What expectations exist between biodiesel and renewable diesel production 

levels? Both use the same feedstock (seed oil, yellow and white grease).

• Under what circumstances would we expect biofuels to have a larger 

penetration in the liquid fuels market?

23
Trade-off between domestic light crude oil exports and heavy crude 

oil imports

24

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case (ref2021/d113020a)

0%

5%

10%

15%

20%

25%

30%

35%

40%

2020 2025 2030 2035 2040 2045 2050

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2020 2025 2030 2035 2040 2045 2050

Exports as a fraction of domestic crude production

percentage of domestic production

total crude oil exports/

total crude oil production

light crude oil exports/

light crude oil production

Light crude exports and heavy crude imports

thousand barrels per day 

light crude oil exports

heavy crude oil imports
Assumptions/questions to evaluate for AEO2022

• What percentage of domestic production of light crude oil is expected to be 

exported? Will it be balanced by heavy crude imports?

• Will refinery utilization continue to be high and balanced by product exports?

• What expectations exist between biodiesel and renewable diesel production 

levels? Both use the same feedstock (seed oil, yellow and white grease).

• Under what circumstances would we expect biofuels to have a larger 

penetration in the liquid fuels market?

25
Will high refinery utilization be supported by product exports?

26

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case (ref2021/d113020a)

0%

20%

40%

60%

80%

100%

2020 2025 2030 2035 2040 2045 2050

Refinery utilization 

percentage

0

5

10

15

20

25

30

2020 2025 2030 2035 2040 2045 2050

Product demand and exports

million barrels per day

product demand

product exports

total product 

demand and 

exports
Assumptions and questions to evaluate for AEO2022

• What percentage of domestic production of light crude oil is expected to be 

exported? Will it be balanced by heavy crude imports?

• Will refinery utilization continue to be high and balanced by product exports?

• What expectations exist between biodiesel and renewable diesel production 

levels? Both use the same feedstock (seed oil, yellow and white grease).

• Under what circumstances would we expect biofuels to have a larger 

penetration in the liquid fuels market?

27
0

0.05

0.1

0.15

2020 2025 2030 2035 2040 2045 2050

Biodiesel and renewable diesel production

million barrels per day

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case (ref2021/d113020a)

Biodiesel production exceeds renewable diesel production 

in AEO2021 reference case

28

biodiesel

renewable 

diesel
Assumptions and questions to evaluate for AEO2022

• What percentage of domestic production of light crude oil is expected to be 

exported? Will it be balanced by heavy crude imports?

• Will refinery utilization continue to be high and balanced by product exports?

• What expectations exist between biodiesel and renewable diesel production 

levels? Both use the same feedstock (seed oil, yellow and white grease).

• Under what circumstances would we expect biofuels to have a larger 

penetration in the liquid fuels market?

29
Source: U.S. Energy Information Administration, Annual Energy Outlook 2021, Reference case (ref2021/d113020a)

High oil price promotes a higher penetration of biofuels into the 

gasoline and diesel liquid fuels market

Projected biofuels percentage of gasoline and diesel consumption

AEO2021 oil price cases

percentage

30

0%

5%

10%

15%

2010 2020 2030 2040 2050

High Oil Price

Reference

Low Oil Price

2020

history projections
Recent events in the liquid fuels market: modeling hurdles for 

LFMM

• Some refineries have converted to renewable diesel production facilities

– What are the retrofit costs?

– What refinery characteristics make this conversion potentially feasible: size, complexity, 

location?

– How can we tie refinery rationalization with conversion to renewable diesel capacity additions?

• Washington State has passed a bill to create a low-carbon fuel standard 

(LCFS) program to start in 2023

– What will be the LCFS requirements?

– What will be the carbon intensities?

– What fuels and vehicles will be included?

– Washington is not a region in LFMM.

31
Assumptions and questions to evaluate for AEO2022: 

liquid fuels markets

• What percentage of domestic production of light crude oil is expected to be 

exported? Will it be balanced by heavy crude imports?

• Will refinery utilization continue to be high and balanced by product exports?

• What expectations exist between biodiesel and renewable diesel production 

levels? Both use the same feedstock (seed oil, yellow and white grease).

• Under what circumstances would we expect biofuels to have a larger 

penetration in the liquid fuels market?

32
Natural gas markets

33
• Natural Gas Annual data through 2019

• Historical data on Mexico and Canada through 2020

• Pipeline capacity and pipeline projects tracked that we track

• Natural gas spot price data

• Additional changes that can drive projections include:

– World oil price assumption

– Economic recovery from COVID-19 and the related consumption changes

– Short-Term Energy Outlook forecast (2020-2022 data)

Planned data updates and changes for AEO2022

34
• Which consumption sectors are most likely to see growth or declines over 

the next 30 years?

• What changes to interstate natural gas flows and pipeline infrastructure can 

we expect?

• Which liquefied natural gas (LNG) facilities that have yet to reach a final 

investment decision (FID) are most likely to come online, fueling LNG export 

growth?

• How much can U.S. natural gas pipeline exports grow?

Assumptions and questions to evaluate for AEO2022

35
$0

$2

$4

$6

$8

$10

$12

2000 2010 2020 2030 2040 2050

2020

history projections

Low Oil and 

Gas Supply

Reference

High Oil 

and Gas 

Supply $0

$1

$2

$3

$4

$5

$6

2019 2020 2021 2022

2021 May STEO

2020 October STEO

October 2019 STEO

May 2021 

history forecast

AEO 2021 Henry Hub natural gas spot price

2020 dollars per million British thermal units

STEO Henry Hub natural gas spot price

dollars per million British thermal units

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 Reference Case and Short-Term Energy Outlooks

AEO and STEO Henry Hub prices

36
Natural gas disposition by sector and net export

trillion cubic feet

Change in natural gas disposition and net exports

relative to 2020 in trillion cubic feet

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 Reference Case

Change in natural gas disposition by sector and net exports

37

0

5

10

15

20

25

30

35

40

45

2020 2030 2040 2050 2020 2030 2040 2050

-2

0

2

4

6

8

10

12

electric power

commercial

residential

transportation

industrial

net exports

electric power

commercial

transportation

industrial

net exports

residential
AEO 2021 natural gas consumed for electric power

trillion cubic feet

STEO natural gas consumed for electric power

billion cubic feet per day

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 Reference Case and Short-Term Energy Outlooks

Natural gas consumption by the electric power sector

38

0

2

4

6

8

10

12

14

16

18

2010 2020 2030 2040 2050

2020

history projections

High Oil 

and Gas 

Supply

Reference

Low Oil 

and Gas 

Supply

0

5

10

15

20

25

30

35

40

45

50

2019 2020 2021 2022

2021 May STEO

2020 October STEO

October 2019 STEO

May 2021

history forecast
• Which consumption sectors are most likely to see growth or declines over 

the next 30 years?

• What changes to interstate natural gas flows and pipeline infrastructure can 

we expect?

• Which liquefied natural gas (LNG) facilities that have yet to reach a final 

investment decision (FID) are most likely to come online, fueling LNG export 

growth?

• How much can U.S. natural gas pipeline exports grow?

Assumptions and questions to evaluate for AEO2022

39
Source: U.S. Energy Information Administration, Annual Energy Outlook 2021 Reference Case

Mid-Atlantic and Ohio natural gas flows

Natural gas flows from mid-Atlantic and Ohio

trillion cubic feet

40

0

1

2

3

4

5

6

7

8

9

10

2010 2020 2030 2040 2050

2020

history projections

into Southeast

into New England

Into East Midwest
• Recently completed interstate natural gas projects include:

– Buckeye Xpress (December 2020)

– Atlantic Bridge Project Phase 2 (January 2021)

– NGPL Gulf Coast Southbound Project Phase II (March 2021)

– Southeastern Trail Expansion Project (March 2021)

• Interstate projects currently under construction or partially complete include:

– Double E pipeline (construction, in-service planned for 2021)

– Mountain Valley Pipeline (construction, in-service planned for 2022)

– Supply Header Project (construction, in-service planned for 2022)

• Interstate natural gas pipeline projects that have been approved but have not yet 

started construction include:

– Gulfstream Phase VI Expansion Project (planned in-service 2022)

– Mountain Valley Pipeline Southgate (planned in-service 2023)

Natural gas pipeline infrastructure

41
• Which consumption sectors are most likely to see growth or declines over 

the next 30 years?

• What changes to interstate natural gas flows and pipeline infrastructure can 

we expect?

• Which liquefied natural gas (LNG) facilities that have yet to reach a final 

investment decision (FID) are most likely to come online, fueling LNG export 

growth?

• How much can U.S. natural gas pipeline exports grow?

Assumptions and questions to evaluate for AEO2022

42
0

2

4

6

8

10

12

2000 2010 2020 2030 2040 2050

AEO2021 U.S. LNG exports by side case

trillion cubic feet

U.S. LNG exports in Reference case

trillion cubic feet

LNG exports

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021

43

0

1

2

3

4

5

6

7

2010 2020 2030 2040 2050

LNG exports

(Reference Case) High Oil Price

High Oil and 

Gas Supply

Reference 

Low Oil and 

Gas Supply

Low Oil Price

Existing and under construction 

U.S. LNG export capacity as of 

May 25, 2021 (nameplate)

2020

history projections

2020

history projections
• LNG projects currently under construction that we assume will come online 

or have recently come online:

– Corpus Christi Train 3 (in-service March 2021)

– Sabine Pass Train 6 (June 2023)

– Calcasieu Pass Train 1 and 2 (November 2023 and November 2024)

– Golden Pass Train 1, 2, and 3 (November 2024, April 2025, and November 2025)

• Other potential projects:

– Costa Azul LNG (FID announced, planned in-service for 2024)

– Texas LNG and Rio Grande LNG (approved by Federal Energy Regulatory Commission, no 

FID yet)

– Annova LNG (cancelled in March 2021)

LNG facilities

44
• Which consumption sectors are most likely to see growth or declines over 

the next 30 years?

• What changes to interstate natural gas flows and pipeline infrastructure can 

we expect?

• Which liquefied natural gas (LNG) facilities that have yet to reach a final 

investment decision (FID) are most likely to come online, fueling LNG export 

growth?

• How much can U.S. natural gas pipeline exports grow?

Assumptions and questions to evaluate for AEO2022

45
Pipeline imports from Canada

trillion cubic feet

Pipeline exports to Canada

trillion cubic feet

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021

Canada natural gas pipeline imports and exports

46

0

1

2

3

4

2010 2020 2030 2040 2050

2020

history projections

Low Oil and 

Gas Supply

Reference

High Oil 

and Gas 

Supply

0

1

2

3

4

2010 2020 2030 2040 2050

2020

history projections

High Oil 

and Gas 

Supply

Reference

Low Oil and 

Gas Supply
Source: U.S. Energy Information Administration, Annual Energy Outlook 2021

Mexico natural gas pipeline exports

Pipeline exports to Mexico

trillion cubic feet 

47

0

1

2

3

4

2010 2020 2030 2040 2050

2020

history projections

High Oil and Gas Supply

Reference

Low Oil and Gas Supply
• Which consumption sectors are most likely to see growth or declines over 

the next 30 years?

• What changes to interstate natural gas flows and pipeline infrastructure can 

we expect?

• Which liquefied natural gas (LNG) facilities that have yet to reach a final 

investment decision (FID) are most likely to come online, fueling LNG export 

growth?

• How much can U.S. natural gas pipeline exports grow?

Assumptions and questions to evaluate for AEO2022:

natural gas markets

48
Contacts

49

Petroleum & Natural Gas Modeling Team Lead: 

Mindi Farber-DeAnda: mindi.farber

-deanda@eia.gov

Lead Modeler:

Katie Dyl: kathryn.dyl@eia.gov

Liquid Fuels Market Module:

General: Peter Colletti: peter.colletti@eia.gov

Elizabeth May: elizabeth.may@eia.gov

Biofuels: Estella Shi: estella.shi@eia.gov

International Energy Module:

Adrian Geagla: adrian.geagla@eia.gov

Oil & Gas Supply Module:

Albert Painter: albert.painter@eia.gov

Dana Van Wagener: dana.vanwagener@eia.gov

Natural Gas Markets Module:

Stephen York: stephen.york@eia.gov

Mary Lewis: mary.lewis@eia.gov
We welcome feedback on our assumptions and documentation

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

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

• NEMS Model Documentation:

– Oil and gas supply (OGSM) 

www.eia.gov/outlooks/aeo/nems/documentation/ogsm/pdf/m063(2020).pdf

– Natural gas market (NGMM) 

www.eia.gov/outlooks/aeo/nems/documentation/ngmm/pdf/mgmm(2020).pdf

– Liquid fuels market (LFMM) 

www.eia.gov/outlooks/aeo/nems/documentation/lfmm/pdf/m059(2020).pdf

– International energy (IEM) 

www.eia.gov/outlooks/aeo/nems/documentation/international/pdf/m071(2020).pdf

• Trends and Expectations Surrounding the Outlook for Energy Markets: 

www.eia.gov/outlooks/aeo/trends_expectations.php/

50
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Annual Energy Outlook | www.eia.gov/aeo

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International Energy Statistics database | www.eia.gov/ies

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For more information

51