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

Assumptions and Expectations for 

Annual Energy Outlook 2013: 

Liquid Fuels Markets Working Group

AEO2013 Liquid Fuels Markets Working Group Meeting

Office of Petroleum, Natural Gas & Biofuels Analysis

August 27, 2012 | Washington, DC

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE
Overview

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change 2

• NEMS and LFMM

– For AEO2012, LFMM was used in a single side case.

– For AEO2013, LFMM will be used in all cases

• LFMM and the changing structure of the refining industry

– AEO2012 final report: http://www.eia.gov/forecasts/aeo/IF_all.cfm#refiningind

• New/revised policy issues

– California LCFS

– California AB32

– RFS
NEMS – a model of the U.S. energy economy

3

LFMM

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
LFMM models the changing refining industry

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Crude 

Oil

Biomass

Other 

Fossil 

Fuels

Distillation

Dry/Wet Mill

Hydrocracking

Coking

Enzymes

Gasification

Primary

Feedstocks

Refining

Processes

Refined

Products

End-Use

Products

Ethanol

Liquids/ 

Blendstock

Biomass 

Solids

Biodiesel

Residual Fuel

Heating Oil

Diesel Fuel

Jet Fuel

Gasoline

E85

Biomass Heat 

and Power

Fossil Fuel 

Solids

Chemicals

Chemicals

Liquids/ 

Blendstock

Petroleum 

Solids

Chemicals

Agricultural

LPG

Asphalt

Petcoke

Liquid

Fuels

Petroleum

Sector

Non-Petroleum 

Fossil Fuel

Sector

Biofuels

Sector

Dry/Wet Mill Gasification Enzymes

Direct Liquefaction

Gas Plant 

Fractionator

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
New/revised policies modeled for AEO2013

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• California LCFS (Low Carbon Fuel Standard)

• California AB32 – Global Warming Solutions Act

• Renewable Fuel Standard (RFS2)

– Not a new policy, but LFMM includes new assumptions

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
California Low Carbon Fuel Standard 

(LCFS)

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• The LCFS, as regulated by the California Air Resources 

Board (CARB), requires “obligated parties” to reduce the 

average carbon-intensity of motor gasoline blends (E10, E85, 

etc.) and diesel placed into commerce

• The maximum allowable carbon intensities decrease over 

time

• Potential impacts on the liquid fuels market include 

interaction with the national RFS, increased imports of 

sugarcane ethanol from Brazil, motor fuel prices in California 

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
California AB32 –

Global Warming Solutions Act

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• “establishes a system of market-based declining annual 

aggregate emission limits for sources or categories of sources 

that emit greenhouse gas emissions, applicable from January 

1, 2012, to December 31, 2020” 

 Source: http://www.arb.ca.gov/cc/ab32/ab32.htm/

• This cap and trade approach applies to the liquid fuels 

production industry, other industries that emit GHG, and 

electricity production.

• AB 32 will likely impact liquid fuel prices and production levels 

in California, and may have a broader impact.

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
Renewable Fuel Standard (RFS2)

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Revised assumptions for AEO2013 -

• Set hardship-based waiver prices for Total Biofuels and 

Advanced Biofuels, in case production cannot satisfy the 

mandate at reasonable cost

• Enables two-way ethanol trade between U.S. and Brazil

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
Contacts

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Beth May: elizabeth.may@eia.gov

Michael Cole: michael.cole@eia.gov

Next Working Group Meeting

Planned for October 2012, exact date to be determined.

Will present preliminary AEO2013 results.

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change
For more information

10

Office of Petroleum, Natural Gas, & Biofuels Analysis Working Group Presentation for Discussion Purposes 

Washington DC, August 27, 2012 DO NOT QUOTE OR CITE as results are subject to change

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