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November 30, 2015

MEMORANDUM FOR: JOHN CONTI

ASSISTANT ADMINISTRATOR FOR ENERGY ANALYSYS

MICHAEL SCHAAL

DIRECTOR, OFFICE OF ENERGY ANALYSIS

JOHN POWELL

TEAM LEADER, LIQUID FUELS MARKET TEAM

MINDI FARBER-DeANDA

TEAM LEADER, BIOFUELS & EMERGING TECHNOLOGIES 

TEAM

FROM: LIQUID FUELS MARKET TEAM

SUBJECT: First AEO2016 Liquid Fuels Markets Working Group Meeting

Summary (presented on 11-19-2015)

Attendees: (EIA) John Conti, Michael Schaal, John Powell, Mindi Farber-DeAnda,

Adrian Geagla, Beth May, Mason Hamilton, Hannah Breul, 

Chris Namovicz, Melissa Lynes

Austin Brown (OSTP), Ernest Carter (FAS/USDA), 

Dave Hirshfeld (MathPro), Bryan Just (API)

Attending by Phone: Adam Christensen, Erica Folio (US DOE), Jennifer Li (US DOE),

Niko Kydes (OnLocation Inc), Sandy Sanders (OnLocation Inc),

Leticia Phillips (UNICA), Joanne Shore (AFPM),

Morgan Summers (NETL),

(EIA) Faouzi Aloulou, Mike Cole, David Manowitz

Presenters: John Powell (EIA), Mindi Farber-DeAnda (EIA)

Presentation:

The presentation was broken into two topic areas: petroleum and biofuels/non-petroleum. The petroleumrelated assumptions/updates were presented by John Powell (EIA team leader of the Liquid Fuels Markets 

Team). John’s presentation described crude oil export assumptions, improved representation of product 

import/export curves, a new methodology that captures the impact of net crude and product imports on 

“rest of world” crude supply curves, a plan to review pipeline, rail, and vessel capacity and tariff data

(will not include the Keystone XL pipeline capacity), an improved methodology for pricing fuel oil to 

electric utilities in Census Division 9, and plans to improve STEO benchmarking of product prices. The 

biofuels/non-petroleum assumptions/updates were presented by Mindi Farber-DeAnda (EIA team leader 

of the Biofuels & Emerging Technologies Team). Mindi discussed EIA’s efforts to develop/update capital 
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investment data for liquid fuels production technologies, which included workshops with area experts, 

and separate discussions with specialized companies – like GEVO to inform biobutanol investments. This 

has culminated in the development of an “Engineering Economic Analysis Guide” to document capital 

investment decision analysis in LFMM to be released when it becomes available. Mindi announced that 

the LFMM plans to incorporate the new RFS rule for the years 2014, 2015, and 2016 that EPA released 

on November 30; however, the model will continue to exclude the renewable fuel oil and biogas 

representation in the RFS for AEO2016. EIA is investigating the representation of new California LCFS 

provisions. EIA will also review E15 market penetration assumptions, and update if appropriate.

Discussion/questions

There was some interest in the schedule for this year’s AEO, and which side cases were planned that 

affect liquid fuels. Preliminary results for the reference case are expected around March/April, with 

additional scenarios to follow, and final report in June 2016. Side case options are currently under review, 

so nothing is final or ready for release at this point in time. Currently, there are no plans for a “high 

technology” case related to biofuels production, but there will be a high resource case (high technology 

assumption for petroleum supply). An attendee suggested EIA speak with other DOE offices about some 

ideas for additional cases. Assistant Administrator for Energy Analysis indicated that EIA would not be 

entertaining suggestions for additional NEMS scenarios as resources are limited and the schedule is 

abbreviated.

A main focus of interest was on renewable fuels feedstock prices and technology representation. EIA 

explained that a separate model (POLYSIS, adapted for NEMS beginning with AEO2015) provides the 

biomass supply curves (corn, soybean, seed oil, but not woody biomass) to the LFMM. The advantage of 

this separate model is that it keeps supply stable from year to year and coordinates consumption with 

electric generation uses. A suggestion was made that EIA talk to Paul Westcott (USDA/ERS) to get more 

recent updates on land availability assumptions so that both USDA and EIA’s assumptions will be in sync 

with one another. It was noted that lower petroleum prices can impact longer term land values and 

encourage a move to different feedstock. A USDA report will be released in February 2016, but this will 

be too late for AEO2016. This can be brought up in a separate EIA working group meeting for 

Renewables/Electricity, to be held by Chris Namovicz on December 7, 2015.

Another topic of interest centered on higher ethanol blend gasoline and corresponding vehicle demands 

for the high ethanol blends. Melissa Lynes (an EIA transportation modeler) suggested that the real barrier 

was delivery infrastructure. The conversation expanded to biogas and compressed NG in long-haul heavy 

duty vehicles, to which EIA responded that this will not be modeled for AEO2016.

A question was asked if final decisions on updates related to LCFS, E15 penetration, technology costs, 

etc. will be published or posted before the AEO is released. This information typically is a part of the 

Assumptions Document released a month or two after the AEO final release; however, this information 

could be made available as part of the second LFMM working group meeting. Attendees discussed 

California’s appetite for sugarcane ethanol imports from Brazil and renewable diesel imports from Neste 

facilities in Europe and Asia. EIA confirmed that the LFMM will update the new carbon intensity (CI) for 

sugar cane ethanol.
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Actions to be taken in response to the discussion above:

- A suggestion was made to Chris Namovicz (renewables/electricity team) to contact Paul 

Westcott to get more recent update on feedstock information/land availability 

assumptions prior to public release. 

Next LFMM Working Group meeting: March 2016