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

AEO2018: review and your feedback

For

First Industrial Working Group

May 22, 2018 | Washington, DC

By

OEA Industrial Team
Overview

• Recap of AEO2018

– Overview of recently released AEO2018

– Some larger industry results

– A word about paper

• Your feedback on AEO2018 so we can improve AEO2019

OEA Industrial Team | Washington, DC | May 

22, 2018 2
2.2%

2.1%

0.9%

0.7%

116

2,244

2,792

1,209 729

387 417 448

223 375

173

NMM MBD OthMan Con Food Othchem Bchem Mining PriMet Ag Paper

average annual growth rate 2017-2050 (bars) 2017 shipments billion 2009 USD (squares)

OEA Industrial Team | Washington, DC | May 

22, 2018

Value of Shipments: Nonmetallic minerals (NMM) and metal-based 

durables (MBD) show fastest growth in the AEO2018

Source: AEO2018

3

2%

1%

0%
OEA Industrial Team | Washington, DC | May 

22, 2018

Natural gas is the most consumed energy source in the Industrial 

sector, while industry consumption shares remain mostly steady

Source: AEO2018 Reference case

4

0

5

10

15

20

25

30

35

40

2020 2030 2040 2050

Industrial energy consumption by subsector 

2017

projections

nonmanufacturing

bulk chem 

feed

bulk chem hp

other energy 

intensive

non-energy 

intensive

0 refining

5

10

15

20

25

30

35

40

2020 2030 2040 2050

Industrial energy consumption by energy 

source

quadrillion Btu

natural gas

hydrocarbon

gas liquids

renewables

petroleum

purchased

electricity

coal

2017

projections
OEA Industrial Team | Washington, DC | May 

22, 2018

Natural gas fuel consumption crucial to many manufacturing 

industries, though 3 industries consume the majority of it

Source: AEO2018 Reference case

5

35%

40%

22%

11% 21%

13%

19%

13%

14%

12%

0.0

1.5

3.0

4.5

6.0

7.5

9.0

2017 2050

Natural gas fuel consumption in 

manufacturing

quadrillion btu

minor 

consumers

other nonenergy 

intensive

food

refining

bulk chemicals 

heat and power

0% 20% 40% 60% 80% 100%

glass

bulk chem h&p

food

aluminum

metal based durables

steel

refining

paper

oth. non-energy intensive

Natural gas fuel use intensity by manufacturing 

industry

percent of industry fuel consumption

2017

2050
OEA Industrial Team | Washington, DC | May 

22, 2018

CHP is increasingly natural gas fired, with bulk chemicals constituting 

an ever increasing share

Source: AEO2018 Reference case

6

0

50

100

150

200

250

2020 2030 2040 2050

Combined heat and power generation by industry 

billion kilowatthours

2017

projections

refining

bulk 

chemicals

other

paper

food 0

50

100

150

200

250

2020 2030 2040 2050

Combined heat and power generation by fuel

billion kilowatthours

natural

gas

other

coal

renewables

2017

projections
• Bulk chemicals will come to 

increasingly rely on natural gas for 

heat and power

• Substantial increase in LPG & 

other feedstocks in MECS – about 

340 trillion Btu - increase of 18% 

between MECS 2010-2014

• Shares in LPG & other and 

petrochemical feedstocks don’t 

change much over time

Bulk chemicals energy consumption

Trillion Btu

OEA Industrial Team | Washington, DC | May 

22, 2018

Bulk chemicals – what a difference a MECS makes

Source: AEO2018 Reference case

7

0

2,000

4,000

6,000

8,000

10,000

12,000

2020 2030 2040 2050

natural gas

feedstocks

Petrochem 

feedstocks

LPG & other 

feedstocks

natural gas 

heat & power

purchased

electricity

petroleum & 

coal

2017 projections
• Iron and steel and aluminum 

industries both increasing 

secondary processing more quickly 

than in past

• Steel electric arc furnace (EAF) 

proportion steady at ~67% 

throughout projection

• Energy intensity declines slightly 

2017-2050

Iron & steel industry energy consumption

Trillion Btu

OEA Industrial Team | Washington, DC | May 

22, 2018

Steel: BF/BOF and EAF shares remain steady; small declines in energy 

intensity over time

8

0

200

400

600

800

1,000

1,200

1,400

2020 2030 2040 2050

coal

natural gas

purchased

electricity

petroleum

2017 projections
• Renewables share increases from 

56% in 2017 to 66% by 2050

• Total electricity consumption

– Total electricity (purchased + 

generated) declines 5% 2017-2050

– CHP generated increases 15% 

• Intensity (energy/$) increases to 

2035 – increased CHP doesn’t 

explain all of it

Paper energy consumption, trillion Btu

OEA Industrial Team | Washington, DC | May 

22, 2018

Paper energy consumption increases 1%/year; renewables and natural 

gas fastest growing

9

0

500

1,000

1,500

2,000

2,500

2020 2030 2040 2050

2017 projections

renewables

natural gas

purchased

electricity

petroleum & 

coal
Recovery Furnaces

1 2 3 4 5 6

0.174 0.159 0.420 0.045 0.045 0.156

0.174 0.159 0.420 0.045 0.045 0.156

165490.717 154202.927 154202.927 154202.927 161913.073 164203.985

6619.629 6168.552 6168.552 6168.552 6476.693 6568.159

-780.4429 110.8776 110.8776 110.8776 110.8776 -1074.3891

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

-6950.0000 -5600.0000 -6500.0000 -6600.0000 -6950.0000 -6950.0000

2100 2100 2100 2100 2100 2100

0.0000 0.0000 0.0000 0.0000 2.04166 -1.23031

0.00000 3.56827 4.35809 2.10603 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000 (6,950) (6,950)

(6,950) (5,600) (6,500) (6,600) 0.0000 0.0000

0.0000 0.0000 0.0000 0.0000

• Shifted inputs for two recovery 

furnace technologies increased 

black liquor output

• Technology 6 – most efficient -

chosen less often than it should 

have been

• Less CHP was used because 

Technology 6 is a CHP technology

OEA Industrial Team | Washington, DC | May 

22, 2018

Source: ironstlx.xlsx input file

But this does: Bug discovered in ironstlx.xlsx input file, which will be 

fixed for AEO2019

10
Paper energy consumption, trillion Btu

OEA Industrial Team | Washington, DC | 

May 22, 2018

After fix, paper energy consumption increases 0.6%/year; “Before” on 

the left, “After” on the right

Sources: AEO2018 Reference case and AEO2018 run with corrected input file

11

0

500

1,000

1,500

2,000

2,500

2020 2030 2040 2050

2017 projections

renewables

natural gas

purchased

electricity

petroleum & 

coal

2020 2030 2040 2050

renewables

natural gas

purchased

electricity

petroleum & 

coal

2017 projections
Your feedback on AEO2018 – how can we improve for 

AEO2019?

• What would you like to see more of?

– Coverage?

– Content?

• What can be improved? 

• What insights from your industry can help us?

• Visuals

– New?

– Improve existing? 

OEA Industrial Team | Washington, DC | May 

22, 2018 12
Industrial meeting materials will be posted in 

about a month

Link:

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

13 OEA Industrial Team | Washington, DC | 

May 22, 2018

Next meeting – TBA – may be working 

group or smaller workshop
Thank you for your attention!

Industrial Team: EIA-OECEAIndustrialTeam@eia.gov

Kelly Perl (202) 586-1743

AEO Analysts

Farah Naz (202) 287-6329

Paul Otis (202) 586-2306

IEO Analyst

Matthew Skelton (202) 287-5660

OEA Industrial Team | Washington, DC | May 

22, 2018 14
Preview of AEO2019 and beyond

• Review relationship between types of pulp & paper; paper composition 

changes over time pulp composition doesn’t

• Retire Coal CHP units to reflect recent history; bulk chemicals CHP coal 

retirements accelerating

• Physical output updates for the process flow industries

• Get ready for a recycling side case

• Expand data sources – EPA GHGRP 

• One day data update

OEA Industrial Team | Washington, DC | May 

22, 2018 15
• 2017 values result of different 

starting values

– Quadrennial MECS update 

– Annual data updates

• State Energy Data System for 

history and manufacturing 

allocation

• Benchmarking 

– STEO short run

– Individual industries

• New MECS changes nonmanufacturing

OEA Industrial Team | Washington, DC | May 

22, 2018

Changes in energy intensity between AEO2018 and AEO2017 occur as 

a result of MECS2014 and historical updates

Source: AEO2018 and AEO2017 Reference cases

16

0 3 6 9 12

paper

metal-based durables

mining

food

oth. non-energy intensive

bulk chem. feedstocks

refining

iron & steel

agriculture

construction

bulk chem. heat & power AEO2017

AEO2018

Energy intensity by industry(Reference), 2017 

trillion Btu/billion 2009 dollars shipments

declines

increases