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

AEO2018 Industrial Working Group meeting 1: 

planned updates

Industrial Working Group 

Industrial Team: Kelly Perl, Team Leader; Chris Dickerson, Farah Naz, Paul Otis, & 

Matt Skelton; Intern: Ivana Olivares

August 1, 2017| Washington, DC

Preliminary Results. Do not Cite or Disseminate.
Plans for AEO2018 - full AEO

• What is a full AEO?

– Extensive model and data updates allowed 

– Side cases

• Basic (all years): Hi/Lo macro, Hi/Lo Price, Hi/Lo Resource & Technology

• Full AEO years: policy cases, energy efficiency case, ?

• Policy cases

• Major data / input updates – notably 2014 MECS

• Small model changes

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 2
• Inputs

– Macroeconomic

– Prices

– Energy demand from Liquids 

Fuels Market Module, Oil & 

Gas Supply Module

– Variables from Buildings & 

Transportation models for 

nonmanufacturing

• Returns

– Energy consumption by fuel

– Technologies chosen for 5 

process flow industries

Figure source: IDM 2014 Documentation, Figure 1

How the IDM Works

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Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate.
Policy cases: some explanation

• AEO Reference case projections assume laws / regulations currently on 

books (including those that take effect in future); some examples

– California carbon policies and 2030 reduction goal in effect

– Boiler MACT (Maximum Achievable Control Technology – aka NESHAP) 

– Clean Power plan in Reference case for AEO2016 – AEO2017

• Policy side cases used to determine effect of likely, supposed, or 

hypothetical policies

– We had Extended Policy case in AEO2016 that extended CHP tax credits that expired in 

2017 to end of projection period – small effect for Industrial

– May have different approach to policy cases this year: some discussion of “high” and “low” 

policy

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 4
• Economic activity no longer 

near recessionary levels as 

in 2010 

• Shale gas production 

nationwide increased more 

than 150% over 2010-2014

• Return of some industries, 

notably agricultural 

chemicals

Source: 2014 MECS preliminary release https://www.eia.gov/consumption/manufacturing/reports/2014/pre_estimates/?src=‹ Consumption 

Manufacturing Energy Consumption Survey (MECS)-f1

2014 MECS update: different world from 2010

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Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate.
MECS change far reaching

• Manufacturing

– All manufacturing industries benchmarked to MECS

– New Unit Energy Consumption (UEC) and Technology Possibility Curves (TPC)s for the end use 

industries change

– Starting values for manufacturing for the process flow industries

• Nonmanufacturing changes too 

– Base year (2014) nonmanufacturing energy is total energy less manufacturing – with some 

adjustments

• Formula: Non-manufacturing energy = (2014 SEDS – 2014 MECS)

• We adjust if the result is implausible using series such as EIA’s Fuel Oil and Kerosene Sales 

(FOKS), Economic Census, and USDA products

– Bring back the agriculture TPCs by activity – irrigation, vehicles and buildings

• Base year reset to 2014 from 2010 – year model results start

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 6
Other data / input updates

• Renewable and non-biogenic waste fuel allocation in cement, agriculture, 

and food – use USGS and EPA’s GHGRP database

– Short run goal: better representation of renewables and waste fuel in these industries

– Long run: deepen our thinking on combustion of renewables and waste

• CHP

– New CHP cost and type data – last time done AEO2012

– Updated and simplified calculation of ACEEE regional coefficients – now based on EIA Form 

860 survey of electric capacity (done)

– Biennial data update for CHP capacity and generation from Forms 860 and 923

• Chemicals – history and near term projections

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 7
Other data / input updates

• Process flow inputs for paper, glass, cement & lime, steel, and aluminum in 

ironstlx.xlsx file

– Logistic coefficients – determine how important fixed cost, fuel cost, and emissions are in 

selecting technology

– Boiler / CHP exogenous 

– Stretch: update physical outputs to 2015 or 2016 where known – primary aluminum 

production has declined significantly

• Annual updates

– Macroeconomic - #1 influence in our modeling

– Benchmarking

• History / Regional update to 2015 SEDS (State Energy Data System)

• STEO (Short Term Energy Outlook) – results to 2019

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 8
Model Changes

• Individual industry benchmarked coal consumption – is there a fix?

– Coal consumption in sum of IDM industries ~50 trills (4% higher) than Table 6 amount –

nearly constant

– Connected to when refinery model, which fills in refinery variables, is called

– Good news: < 3 trills for petroleum, spot on for all other fuels

• Steel: Final fix to metallurgical coal consumption increasing with respect to 

carbon prices – currently have a brute force fix

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 9
We don’t do this alone: notable collaborations

• Macroeconomics team

• MECS team

• OEA Natural gas team

• SEDS team

• YOU - members of the Industrial Working Group

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate. 10
Industrial meeting materials will be posted in 

about a month

Link:

https://www.eia.gov/outlooks/aeo/workinggroup/industrial/

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Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017 PRELIMINARY. Do not cite or disseminate.

Second meeting: 9/14/17, 1:00-2:00 EDT
Thank you for your attention!

Industrial Team: EIA-OECEAIndustrialTeam@eia.gov

Kelly Perl (202) 586-1743

Chris Dickerson* (202) 586-6664

Farah Naz* (202) 287-6329

Paul Otis (202) 586-2306

Matthew Skelton* (202) 287-5660

Industrial Working Group Meeting #1 

Washington, DC | August 1, 2017

*Joined within last year

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