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

AEO2017 Industrial Working Group meeting 2: 

Preliminary results

Industrial Working Group 

Industrial Team: Kelly Perl, Team Leader; Chris Dickerson, Peter Gross, Susan Hicks, 

Paul Otis, & Matt Skelton

September 22, 2016| Washington, DC

Preliminary Results. Do not Disseminate.
AEO2017 What we did

• Extend model to 2050 (now complete)

• Individual industry benchmark improvements 

• Regulation: Kept Boiler MACT as is

• Lowered DRI and relaxed constraints on EAF usage

• Running Limited side cases: macro, price, and resource

Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016 Preliminary results. Do not disseminate. 2
Very little remaining work for this year

• Trying to explain steel output increase in 2040

• May do additional DRI adjustments

Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016 Preliminary results. Do not disseminate. 3
Industrial results

Excludes Refining

Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016 Preliminary results. Do not disseminate. 4
AEO2017 Industrial Energy consumption slightly lower 

than AEO2016 consumption

EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

5 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

18

20

22

24

26

28

30

32

2012 2015 2020 2025 2030 2035 2040 2045 2050

Industrial Energy consumption, 2012-2050

Ref2017.0920a

Ref2017.0920a_nocpp

AEO2016 Reference Case

quadrillion Btu

Preliminary results. Do not disseminate.
AEO2017 Industrial natural gas consumption about the 

same as AEO2016 consumption until 2030

EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

6 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

6

7

8

9

10

11

12

2012 2015 2020 2025 2030 2035 2040 2045 2050

Industrial Natural Gas consumption, 2012-2050

Ref2017.0920a

Ref2017.0920a_nocpp

AEO2016 Reference

Case

quadrillion Btu

Preliminary results. Do not disseminate.
EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

Natural gas share increases slightly to 40% by 2030; Bulk chemicals 

energy consumption expands

7 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

0

5

10

15

20

25

30

35

2012 2020 2030 2040 2050

Energy Consumption by Fuel

Coal

NaturalGas

Purchased Electricity

Petroleum

quadrillion Btu

0

5

10

15

20

25

30

35

2012 2020 2030 2040 2050

Energy Consumption by Industry

Paper

Iron & Steel 

Food

Bulk Chemicals Heat & Power

Bulk Chemicals Feedstocks

MBD

Nonmanufacturing

Process 

Flow

End Use

quadrillion Btu

Preliminary results. Do not disseminate.
• Bulk chemicals, Paper, Food & 

Steel largest CHP producers in 

IDM

• CHP generation slightly higher than 

AEO2016 until about 2030

• Greatest increase in natural gasfired generation

• Higher bulk chemicals shipments 

may explain

EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

CHP generation slightly higher in AEO2016 vs. AEO2016 

8 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

0

50

100

150

200

250

2012 2020 2030 2040 2050

CHP generation AEO2017 & 

AEO2016

Ref2017.0920a

AEO2016 Reference

Case

billion kWh

Preliminary results. Do not disseminate.
Individual industry results

Industrial Working Group Meeting #2 Washington, DC | September 22, 2016 9
• Bulk chemical shipments generally 

higher than AEO2016; no post2025 decline

• Heat & Power energy intensity 

declines over time because of 

energy efficiency

• Feedstocks lower in AEO2017 –

possible benchmarking effect

Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

AEO2017 Industrial bulk chemicals consumption lower than AEO2016 

as a result of feedstocks

10 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

4,000

6,000

8,000

10,000

12,000

2012 2020 2030 2040 2050

Bulk Chemicals Energy Consumption 

AEO2017 & AEO2016 

Ref2017.0920a

AEO2016

Reference Case

trillion Btu

Preliminary results. Do not disseminate.
Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

AEO2017 Industrial bulk chemicals liquid feedstocks lower than 

AEO2016; natural gas higher

11 Industrial Working Group Meeting #2 Washington, DC | September 22, 2016

0

2,000

4,000

6,000

8,000

2012 2020 2030 2040 2050

AEO2017 

HGL

Petrochemical

NaturalGas

trillion Btu

0

2,000

4,000

6,000

8,000

2012 2020 2030 2040 2050

AEO2016 

trillion Btu
Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

Paper energy consumption for AEO2017 higher than AEO2016; 

shipments largely the difference

12 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

0

500

1,000

1,500

2,000

2,500

3,000

2012 2020 2030 2040 2050

Paper Energy consumption 

AEO2017 & AEO2016

Ref2017.0920a

AEO2016 Reference

Case

trillion Btu

0

500

1,000

1,500

2,000

2,500

3,000

2012 2020 2030 2040 2050

Paper Energy Consumption by Fuel 

AEO2017 

Renewables

Coal

NaturalGas

Purchased Electricity

trillion Btu

Preliminary results. Do not disseminate.
Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

Steel energy consumption for AEO2017 generally lower AEO2016; 

again, shipments largely the difference

13 Industrial Working Group Meeting #2 Washington, DC | September 22, 2016

0

400

800

1,200

1,600

2012 2020 2030 2040 2050

Iron & Steel Energy 

Consumption AEO2017 & 

AEO2016 

Ref2017.0920a

AEO2016

Reference Case

trillion Btu

0

400

800

1,200

1,600

2012 2020 2030 2040 2050

AEO2017 Iron & Steel Energy 

Consumption by Fuel

Coal

NaturalGas

Purchased Electricity

trillion Btu
• Steel output does not cross 100 

million ton mark until late 2030s

• EAF share increases over time, 

especially last 10 years

– 61% in 2012

– 68% in 2040

– 73% in 2050

• Need to explain last 10 year surge 

in output 

Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

EAF shares increase over time, nearly 75% of total steel output by 

2050

14 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

0

20

40

60

80

100

120

140

160

2012 2020 2030 2040 2050

BF/BOF & EAF Output 

EAF

BF/BOF

output in million tons

Preliminary results. Do not disseminate.
• DRI output assumed exogenous in 

model

• Lower capacity in 2015; capacity 

bump in 2022

• Differing use assumptions

– BOF uses 10% of DRI output in 

AEO2017; at least 50% in AEO2016

– EAF now unconstrained

• Lower DRI visibly increases coal 

use

Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case

Direct Reduced Iron (DRI) output lower than last year because output 

lower than originally thought

15 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016

0

2

4

6

8

10

12

14

2012 2020 2030 2040 2050

DRI (Direct Reduced Iron) 

Output 

Ref2017.0920a

AEO2016 Reference Case

output in million tons

Preliminary results. Do not disseminate.
Industrial meeting materials will be posted 

in about a month; macro is already posted. 

Link (new address):

http://www.eia.gov/forecasts/aeo/workinggroup/industrial/

16 Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016 Preliminary results. Do not disseminate.
Thank you for your attention!

Industrial Team: EIA-OECEAIndustrialTeam@eia.gov

Kelly Perl (202) 586-1743

Chris Dickerson (202) 586-6664

Peter Gross (202) 586-8822

Susan Hicks (202) 586-4388

Paul Otis (202) 586-2306

Matthew Skelton (202) 287-5660

Industrial Working Group Meeting #2 

Washington, DC | September 22, 2016 Preliminary results. Do not disseminate. 17