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

Preliminary Results for Annual Energy Outlook 

2014: Liquid Fuels Markets Working Group

AEO2014 Liquid Fuels Markets Working Group Meeting

Office of Petroleum, Natural Gas & Biofuels Analysis

September 19, 2013 | Washington, DC

WORKING GROUP PRESENTATION FOR DISCUSSION PURPOSES

DO NOT QUOTE OR CITE AS RESULTS ARE SUBJECT TO CHANGE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

2

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• Major model changes

• Assumptions

• Results based on AEO2013 price path.
Major Model Changes

3

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• Crude and product distribution system

• Endogenous product exports

• Crude export capability

• Biofuels/xTL

– Improved CTL, GTL, Pyrolysis representations

– Biobutanol

– Revised E15, E85, RFS volume requirements
Crude and product distribution system

4

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• Crude distribution system upgraded to import crude to a 

logical import region 

• Pipeline, rail and marine logistics added to transport to 

refining area

• Potentially, this will limit crude flows and change imported 

crude versus prior AEOs
Endogenous refined product exports

5

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• In AEO 2013, product exports were exogenously determined

• Currently, refiners are increasingly relying on product exports 

to keep refinery utilizations up in the face of dropping refined 

product demands

• LFMM was modified to permit endogenous refined product 

exports to one foreign location
U.S. Refined Product exports and imports

LFMM & BET September 10, 

2013

• U.S. is expected to remain a net exporter of product liquid 

fuels for the entire projection period

• Low domestic natural gas prices and low crude prices versus 

foreign competition should provide economic incentive to US 

refiners to export product into the world markets

• Due to delays in completing new refining capacity in Latin 

America, U.S. product exports are expected to grow in the 

near future 

• Domestic motor gasoline demand will reflect a gradual 

decline, as higher efficiency vehicles begin to lead to lower 

gasoline consumption

6
Crude export capability

7

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• AEO 2014 has the added capability to endogenously permit 

crude exports; this capability is turned off in the Reference 

Case

• Reference case exports are exogenously limited to historical 

destinations

– Eagle Ford to the Canadian East coast

– Michigan crude to Sarnia

– California crude exports, currently zero

– Alaskan crude exports, currently zero

• Capability provides the ability to perform a crude export side 

case
Biofuels and xTL

8

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• CTL, GTL, and Pyrolysis volumes not evident in latest 

Reference Case runs

– Due to technology parameter changes

• Biobutanol volumes evident in Reference Case after 2035

– New technology added to our model with limited industry data

– Key assumption: corn ethanol plants can be retrofitted to produce biobutanol
Biofuel Assumptions for AEO2014

9

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• RFS volume requirements

– All 2013 and 2014 levels as defined by EPA in RFS 2013 Final Rule (net of 

banked RINs)

– 2015 – 2022: Renewable fuel total equal to 2014 mandate (net of banked RINs)

– 2023 – 2040: All levels are held constant at 2022 levels

• E15 allowed to grow to a maximum of 25% of the gasoline 

pool by 2040 if desired

• E85: minimal penetration to meet RFS mandates

• Sugarcane imports from Brazil are available as needed and 

as economic
AEO2014 Emerging Technology Parameters

10

Biochemical

 Corn Ethanol 6,800 18,180 3 0 18,726 82 100 2

 Advanced Grain 

 Ethanol 3,400 43,350 3 0 44,651 83 100 2

 Cellulosic Ethanol 3,700 114,000 10 20 156,750 28 85 3

Thermochemical Catalytic

 Methyl Ester Biodiesel 1,200 19,730 3 0 20,322 21 95 2

 Non Ester Renewable 

 Biodiesel 2,000 28,000 10 20 38,500 21 95 2

 Pyrolysis 5,200 201,000 10 20 276,375 55 90 3

Thermochemical Fischer-Tropsch

 Gas to liquids 48,000 126,000 10 10 152,460 54 85 4

 Coal to liquids 48,000 150,000 10 15 189,750 49 85 5

 Coal+biomass to liq. 48,000 140,000 10 20 184,800 45 85 5

 Biomass to liquids 6,000 262,000 10 20 345,840 38 85 5

All costs expressed in 2012$

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change
AEO2014 Results compared to AEO2013

11

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

• Crude Imports are lower

• Transportation Liquid Fuel Demand

– Gasoline lower

– Diesel similar

• Gasoline and diesel prices 

– Gasoline similar

– Diesel higher

• Net Import Share lower in early years

• Ethanol use in gasoline lower

• CTL, GTL, Pyrolysis production zero in AEO 2014
Crude oil imports

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 12

Gross crude imports

(million bbl/day)

Source: ref2014.091713a, ref2013.102312a

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

AEO2014 AEO2013
Crude imports and domestic crude production in AEO2014

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 13

Crude

(million bbl/day)

Source: ref2014.091713a, ref2013.102312a

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

Gross Crude Imports Domestic Crude Production
Motor gasoline and diesel demand in the transportation sector

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 14

Motor gasoline and diesel demand

(million bbl/day)

Source: ref2014.091713a, ref2013.102312a

0

2

4

6

8

10

12

2005 2010 2015 2020 2025 2030 2035 2040

Mogas AEO2014 Mogas AEO2013 

Diesel AEO2014 Diesel AEO2013 

AEO2014

AEO2014

mogas

diesel

AEO2013

AEO2013
Motor gasoline and diesel prices in the transportation sector

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 15

Motor gasoline and diesel prices

(real 2012 dollars per gallon)

Source: ref2014.091713a, ref2013.102312a

0

1

2

3

4

5

6

2005 2010 2015 2020 2025 2030 2035 2040

Mogas AEO2014 Mogas AEO2013 

Diesel AEO2014 Diesel AEO2013 

mogas

diesel
Net import share of product supplied

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 16

Share of product supplied

(percent)

Source: ref2014.091713a, ref2013.102312a

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025 2030 2035 2040

AEO2014 AEO2013
Ethanol in motor gasoline and E85

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 17

Ethanol

(billion gallons per year)

Source: ref2014.091713a, ref2013.102312a

0

5

10

15

20

2005 2010 2015 2020 2025 2030 2035 2040

ethanol in gasoline AEO2014 ethanol in gasoline AEO2013

ethanol in E85 AEO2014 ethanol in E85 AEO2013 

Ethanol in E85

Ethanol in gasoline
Projected E85 and motor gasoline prices for AEO2014

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change 18

Product prices

Real 2012 dollars per million Btu

Source: ref2014.091713a, ref2013.102312a

0

10

20

30

40

50

2005 2010 2015 2020 2025 2030 2035 2040

Motor gasoline E85
Contacts

19

John Powell: john.powell@eia.gov

Mindi Farber-DeAnda: mindi.farber-deanda@eia.gov

Beth May: elizabeth.may@eia.gov

Michael Cole: michael.cole@eia.gov

Adrian Geagla: adrian.geagla@eia.gov

Irene Olson: irene.olson@eia.gov

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change
For more information

20

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

Washington DC, September 19, 2013 DO NOT QUOTE OR CITE as results are subject to change

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