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

Macro-Industrial Working Group Meeting 

Updates and preliminary results

May 20, 2021 | Washington, DC

By

Office of Integrated and International Energy Analysis

Office of Long-Term Energy Modeling
AEO2022 Macro-Industrial Working Group: Overview

• Review of the Annual Energy Outlook 2021 (AEO2021)

• AEO2022 planned macroeconomic updates

• AEO2022 planned industrial updates

• Longer-term plans for industrial modeling

• Questions and comments

AEO2022 Macro-Industrial Working Group 

May 20, 2021 2

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE
Review of AEO2021 industrial results

AEO2022 Macro-Industrial Working Group 

May 20, 2021 3

WORKING GROUP PRESENTATION FOR 

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Industrial energy consumption by energy source and subsector (AEO2021 Reference case)

quadrillion British thermal units

AEO2022 Macro-Industrial Working Group 

May 20, 2021 4

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

0

5

10

15

20

25

30

35

40

nonmanufacturing

non-energyintensive

other energyintensive

bulk chemical

feedstocks

bulk chemical

heat and power

refining

2020

projections

2020 2030 2040 2050 0

5

10

15

20

25

30

35

40

natural gas

hydrocarbon

gas liquids

petroleum

renewables

purchased

electricity

coal

2020

projections

2020 2030 2040 2050

Consumption in the industrial sector increases fastest for natural gas 

and hydrocarbon gas liquids in AEO2021; bulk chemical energy 

consumption grows the fastest of any industry

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE
Energy intensities decline in most heavy industries, reflecting industrial 

capital stock turnover and adoption of new, more energy-efficient 

technologies

AEO2022 Macro-Industrial Working Group 

May 20, 2021 5

Energy intensity by subsector 

(AEO2021 Reference case)

trillion British thermal units per billion 2012 dollar shipments

Energy-intensive manufacturing

(AEO2021 Reference case)

trillion British thermal units per billion 2012 dollar shipments

0 2 4 6 8

2020

2030

2040

2050

total industry

manufacturing 

energy-intensive 

manufacturing

non-energy intensive

manufacturing

non-manufacturing

0 5 10 15 20 25

food

aluminum

bulk chemical heat and power

bulk chemical feedstocks

glass

paper

iron and steel

cement and lime

2020

2030

2040

2050

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

WORKING GROUP PRESENTATION FOR 

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Growth in electricity from combined heat and power (CHP) is 

primarily in the bulk chemical industry

AEO2022 Macro-Industrial Working Group 

May 20, 2021 6

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

0

50

100

150

200

250

300 2020

projections

0

50

100

150

200

250

300 2020

projections

CHP electricity generation by fuel

(AEO2021 Reference case)

billion kilowatthours

CHP electricity generation by industry 

(AEO2021 Reference case)

billion kilowatthours

other 

bulk 

chemical 

refining 

paper 

coal 

other fuel

natural gas

2020 2030 2040 2050 2020 2030 2040 2050

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE
Review of AEO2021 macroeconomic 

results

AEO2022 Macro-Industrial Working Group 

May 20, 2021 7

WORKING GROUP PRESENTATION FOR 

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Key AEO2021 macro results

• AEO2021 real GDP grows an average of 2.1% per year from 2020 to 2050.

• Average growth of consumption is 2.4% over the projection period.

• Nonresidential fixed investment is projected to grow 3.0% per year from 

2020 to 2050 in the AEO2021. 

• Growth of nonfarm business productivity averages 1.7% over the projection 

period.

AEO2022 Macro-Industrial Working Group 

May 20, 2021 8

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

WORKING GROUP PRESENTATION FOR 

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AEO2022 Macro-Industrial Working Group 

May 20, 2021

Summary of the Macroeconomic Activity Module (MAM) in the 

National Energy Modeling System (NEMS)

9

NEMS

MAM

NEMS macro 

baseline variables

NEMS energy 

variables

Other NEMS modules

MAM variables used 

as inputs in NEMS

Macroeconomic submodule runs 

the New Scenario using new Energy 

Inputs from NEMS

Industrial submodule runs the New 

Scenario of values of shipments by 

industry sectors

Employment submodule runs the 

New Scenario of employment by 

sector

Commercial floorspace 

submodule

MAM applies the 

ratios of the 

New Scenario 

values more 

than the 

Baseline values 

onto the Macro 

Baseline 

variables to 

obtain solution

Regional submodule

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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U.S. economy has yet to fully recover from 31.4% 

contraction in real GDP in the 2nd quarter of 2020

AEO2022 Macro-Industrial Working Group 

May 20, 2021

Source: IHS Markit February 2021 Long-Term U.S. Macroeconomic Model

10

average annual percent growth

-40

-30

-20

-10

0

10

20

30

40

1959Q1 1964Q1 1969Q1 1974Q1 1979Q1 1984Q1 1989Q1 1994Q1 1999Q1 2004Q1 2009Q1 2014Q1 2019Q1

WORKING GROUP PRESENTATION FOR 

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Growth in GDP and most of its components is slower in the 

AEO2021 projection than history

AEO2022 Macro-Industrial Working Group 

May 20, 2021

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

11

average annual percent growth

2.5%

2.7%

4.3%

0.9%

4.7%

5.2%

2.1%

2.4%

3.0%

1.0%

3.4%

3.8%

0.0 1.0 2.0 3.0 4.0 5.0 6.0

Real GDP

Consumption

Fixed Nonresidential Investment

Fixed Residential Investment

Exports

Imports

Projected 30 Year Growth (2020 to 2050)

WORKING GROUP PRESENTATION FOR 

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Previous 30 Year Growth (1989 to 2019)
The AEO2021 projection for GDP and most of its 

components are quicker than recent projections

AEO2022 Macro-Industrial Working Group 

May 20, 2021

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

12

average annual percent growth

2.1%

2.4%

3.0%

1.0%

3.4%

3.8%

1.9%

2.0%

2.5%

1.1%

3.2%

2.8%

1.9%

2.0%

2.5%

1.2%

3.6%

3.0%

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Real GDP

Consumption

Fixed Nonresidential Investment

Fixed Residential Investment

Exports

Imports

AEO2021 (2020-50)

AEO2020 (2019-50)

AEO2019 (2018-50)

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

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Inflation remains moderate throughout the projection and 

bond yields gradually rise from historic lows

AEO2022 Macro-Industrial Working Group 

May 20, 2021

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

13

-2

0

2

4

6

8

10

12

-1

0

1

2

3

4

5

6

1990 2000 2010 2020 2030 2040 2050

2.2%

2.5%

CPI inflation

percent

10-year Treasury yield

percent

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE
Consumption, nonresidential investment and imports 

increase in share of demand mix while government fades

AEO2022 Macro-Industrial Working Group 

May 20, 2021

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

14

2.4%

-5.2%

2.4%

-0.7%

1.1%

2.1%

2.1%

0.4%

-3.7%

0.8%

1.0%

-0.3%

0.5%

2.3%

-6 -5 -4 -3 -2 -1 0 1 2 3

Consumption

Government

Nonresidential Investment

Residential Investment

Inventories

Import

Export

AEO2021 (2020-50)

AEO2020 (2019-50)

change in GDP share over projection period

percentage points

WORKING GROUP PRESENTATION FOR 

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AEO2021 real GDP growth is similar to other projections

AEO2022 Macro-Industrial Working Group 

May 20, 2021

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

15

annual average growth in real GDP

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

201520162017201820192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050

AEO2021 AEO2020 IHSM CBO OASDI Oxford

Projection 2020-50

AEO 2021 1.9

AEO 2020 1.9

IHSM (Aug 2020) 1.9

CBO (Jan 2020) 1.7

OASDI (2020) 2.0

Oxford (Sept 2020) 1.6

WORKING GROUP PRESENTATION FOR 

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Updates for AEO2022 and beyond

AEO2022 Macro-Industrial Working Group 

May 20, 2021 16

WORKING GROUP PRESENTATION FOR 

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Planned Macroeconomic Module changes for AEO2022

• Update of IHS Markit US macroeconomic model.

• Update of Industrial Output model historical data.

• Update of Employment by Industry model historical data.

• Update of Regional Economic Activity historical data.

• Update of Commercial Floor Space historical data.

AEO2022 Macro-Industrial Working Group 

May 20, 2021 17

WORKING GROUP PRESENTATION FOR 

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AEO2022 and COVID-19

• AEO2022 will reflect updated macroeconomic projections (GDP and 

industrial shipments) that underlie industrial energy consumption.

• The forecast in our Short-Term Energy Outlook (STEO) incorporates shortterm impacts of responses to the COVID-19 pandemic on broad industrial 

energy consumption.

AEO2022 Macro-Industrial Working Group 

May 20, 2021 18

WORKING GROUP PRESENTATION FOR 

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AEO2022 planned industrial sector modeling and data 

updates

• Incorporate 2018 Manufacturing Energy Consumption Survey results

• Improve combined heat and power calculations

– Improve iron and steel, paper combined heat and power code, including by allowing 

the paper industry to sell electricity to the grid

– Implement new technology parameters from 2020 study

• Allow ethane/naphtha feedstock-switching in bulk chemical subroutine

• Integrate more effective fuel price sensitivity in process flow models

AEO2022 Macro-Industrial Working Group 

May 20, 2021 19

WORKING GROUP PRESENTATION FOR 

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MECS 2018 update details

• Update unit energy consumptions (UECs) based on MECS 2018 results

• Work in Python instead of using 20+ page spreadsheet to update files

– Streamlines updates and easily allows more frequent updates of non-MECS data

• Macroeconomic data, the denominator of UECs 

• State Energy Data System (SEDS) revisions (nonmanufacturing industrial consumption 

equals SEDS minus MECS)

– Uses other information in unified ways that benefit estimates

• Annual Survey of Manufactures (ASM)

• Greenhouse Gas Reporting Program (GHGRP) from EPA

• Economic Censuses (2017)

• Energy-efficient frontier and other research

AEO2022 Macro-Industrial Working Group 

May 20, 2021 20

WORKING GROUP PRESENTATION FOR 

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Longer-term industrial modeling and data enhancements

• Enhance sensitivity of industrial energy intensity to changes in capacity 

utilization

• Investigate the source of the extra natural gas left for the non-manufacturing 

sectors

• Broader restructuring of the industrial module: convert some parts into 

Python, allow for more systematic data importation from annual data sources

AEO2022 Macro-Industrial Working Group 

May 20, 2021 21

WORKING GROUP PRESENTATION FOR 

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Regular industrial data updates and frequency

AEO2022 Macro-Industrial Working Group 

May 20, 2021 22

Data Update frequency

Manufacturing Energy Consumption Survey Every four years

State Energy Data System Annual

Short-Term Energy Outlook Annual

Combined-heat-and-power data Annual

Feedstock history and short-term projections Annual

WORKING GROUP PRESENTATION FOR 

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Questions or comments?

AEO2022 Macro-Industrial Working Group 

May 20, 2021 23

WORKING GROUP PRESENTATION FOR 

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Contact information:

AEO economic activity and STEO macroeconomic projections

AEO2022 Macro-Industrial Working Group 

May 20, 2021 24

• Russ Tarver Russell.Tarver@eia.gov (202) 586-3991

WORKING GROUP PRESENTATION FOR 

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25

Contact information:

EIA Industrial Group

• Peter Gross (technical lead) Peter.Gross@eia.gov (202) 586-8822

• Nicholas Skarzynski Nicholas.Skarzynski@eia.gov (202) 586-4821

• Daniel Agee Daniel.Agee@eia.gov

• Matthew Skelton Matthew.Skelton@eia.gov (202) 287-5660

• Kelly Perl (senior analyst) Kelly.Perl@eia.gov (202) 586-7908

AEO2022 Macro-Industrial Working Group 

May 20, 2021

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE