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

AEO2023 Macro-Industrial Working Group Meeting 

Updates and preliminary results

August 30, 2022 | Washington, DC

By

Office of Integrated and International Energy Analysis

Office of Long-Term Energy Modeling
Annual Energy Outlook 2023 (AEO2023) Macro-Industrial 

Working Group: Overview

• AEO2023 macroeconomic updates and preliminary results

• Review of Annual Energy Outlook 2022 (AEO2022) industrial results

• AEO2023 industrial updates

• Longer-term plans for industrial modeling

• Discussion and questions

AEO2023 Macro-Industrial Working Group 

August 30, 2022 2

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Review of preliminary AEO2023 

macroeconomic results

AEO2023 Macro-Industrial Working Group 

August 30, 2022 3

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Key preliminaryAEO2023 macro results

• AEO2023 real GDP grows an average of 2.1% per year from 2022 to 2050

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

• Nonresidential fixed investment is projected to grow 2.7% per year from 

2022 to 2050 in the AEO2023 

• Growth of nonfarm business productivity averages 2.1% over the projection 

period

AEO2023 Macro-Industrial Working Group 

August 30, 2022 4

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
AEO2023 Macro-Industrial Working Group 

August 30, 2022

Summary of the Macroeconomic Activity Module (MAM) in the 

National Energy Modeling System (NEMS)

5

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 DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
U.S. economy recovered in 2nd quarter of 2021 from 31.2% 

contraction in real GDP in the 2nd quarter of 2020

AEO2023 Macro-Industrial Working Group 

August 30, 2022 6

average annual percent growth

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

-40

-30

-20

-10

0

10

20

30

40

1959Q11960Q21961Q31962Q41964Q11965Q21966Q31967Q41969Q11970Q21971Q31972Q41974Q11975Q21976Q31977Q41979Q11980Q21981Q31982Q41984Q11985Q21986Q31987Q41989Q11990Q21991Q31992Q41994Q11995Q21996Q31997Q41999Q12000Q22001Q32002Q42004Q12005Q22006Q32007Q42009Q12010Q22011Q32012Q42014Q12015Q22016Q32017Q42019Q12020Q22021Q32022Q4
Growth of GDP and its components is slower in the 

AEO2023 projection as compared to history

AEO2023 Macro-Industrial Working Group 

August 30, 2022 7

average annual percent growth

2.5%

2.7%

4.3%

0.9%

4.7%

5.1%

2.2%

2.6%

2.9%

0.7%

3.5%

3.7%

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 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

Previous 30 Year Growth (1989 to 2019)
Preliminary AEO2023 projections are comparable to past 

AEOs

AEO2023 Macro-Industrial Working Group 

August 30, 2022 8

average annual percent growth

2.1%

2.4%

2.7%

0.5%

3.5%

3.2%

2.1%

2.5%

2.9%

-0.4%

3.4%

3.8%

2.1%

2.4%

3.0%

1.0%

3.5%

3.8%

Real GDP

Consumption

Fixed Nonresidential Investment

Fixed Residential Investment

Exports

Imports

AEO2023 (2022-50)

AEO2022 (2021-50)

AEO2021 (2020-50)

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Near-term spike in inflation before moderating and bond 

yields gradually rise from historic lows

AEO2023 Macro-Industrial Working Group 

August 30, 2022 9

-2

0

2

4

6

8

10

12

-1

0

1

2

3

4

5

6

7

8

1990 2000 2010 2020 2030 2040 2050

2.2%

3.1%

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’s share of the demand mix declines

AEO2023 Macro-Industrial Working Group 

August 30, 2022 10

2.4%

-2.5%

-0.9%

-1.1%

-0.3%

-1.1%

1.3%

4.8%

-3.6%

-0.8%

-2.0%

0.0%

0.6%

2.1%

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

Consumption

Government

Nonresidential Investment

Residential Investment

Inventories

Import

Export

AEO2023 (2022-50)

AEO2022 (2021-50)

change in GDP share over projection period

percentage points

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
AEO2023 real GDP growth is similar to other projections

AEO2023 Macro-Industrial Working Group 

August 30, 2022 11

annual average growth in real GDP

-6

-4

-2

0

2

4

6

8

201520162017201820192020202120222023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050

AEO2023 AEO20222 IHSM CBO OASDI Oxford

Projection 2020-50

AEO 2023 2.2

AEO 2022 2.2

IHS (May 2022) 2.2

CBO (July 2022) 1.8

OASDI (2022) 2.0

Oxford (May 2021) 2.1

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Macroeconomic Module changes for AEO2023

• Update of IHS Markit US macroeconomic model

• Update of Commercial Floor Space data and model

AEO2023 Macro-Industrial Working Group 

August 30, 2022 12

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Review of AEO2022 industrial results

AEO2023 Macro-Industrial Working Group 

August 30, 2022 13

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
0

10

20

30

40

nonmanufacturing

non-energyintensive

other energyintensive

bulk chemicals

feedstocks

bulk chemicals

heat and power

refining

2020 2030 2040 2050

Industrial energy consumption by fuel

AEO2022 Reference case

quadrillion British thermal units 

Industrial energy consumption by subsector 

AEO2022 Reference case

quadrillion British thermal units

AEO2022 Reference case industrial sector energy consumption by fuel 

and sector

0

10

20

30

40

natural gas

hydrocarbon

gas liquids

petroleum and

other liquids

renewables

purchased electricity

coal

2021

projections

2020 2030 2040 2050

14

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

AEO2023 Macro-Industrial Working Group 

August 30, 2022
0 2 4 6 8

2018

2050

Energy intensity by subsector 

AEO2022 Reference case

trillion British thermal units per billion 2012 dollar shipments

Energy-intensive manufacturing by industry

AEO2022 Reference case

trillion British thermal units per billion 2012 dollar shipments

AEO2022 Reference case industrial sector energy intensity

total industry

manufacturing 

energy-intensive 

manufacturing

non-energy intensive

manufacturing

non-manufacturing

0 5 10 15 20 25 30

aluminum

glass

bulk chemical heat and power

bulk chemical feedstocks

paper

iron and steel

cement and lime

2018

2050

15

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

AEO2023 Macro-Industrial Working Group 

August 30, 2022
0

50

100

150

200

250

2020 2030 2040 2050

2021

projections

0

50

100

150

200

250

2020 2030 2040 2050

2021

projections

CHP generation by fuel

AEO2022 Reference case

billion kilowatthours

CHP generation by industry 

AEO2022 Reference case

billion kilowatthours

AEO2022 Reference case industrial sector combined-heat-and-power 

(CHP) generation

other 

bulk 

chemicals 

refining 

paper 

coal

other 

fuels

natural gas

16

Note: Other fuels includes renewables and other petroleum.

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

AEO2023 Macro-Industrial Working Group 

August 30, 2022
AEO2023 industrial updates

AEO2023 Macro-Industrial Working Group 

August 30, 2022 17

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
AEO2023 major updates for industrial—current status

• Use industry-level data from EIA’s Quarterly Coal Report to benchmark steam 

coal use by manufacturing industry (completed)

• Modify cement fuel use, including by assuming no new coal-fired capacity 

(completed)

• Make the iron and steel industry furnace technology choice more sensitive to 

fuel price (completed)

• Break out balance of manufacturing into four separate industries (in progress)

• Add electric boilers as a technology choice (in progress)

• Publish cement and lime process emissions (in progress)

AEO2023 Macro-Industrial Working Group 

August 30, 2022 18

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Potential changes resulting from the Inflation Reduction Act

• Combined-heat-and-power tax credits extended through the end of 2024 

(completed)

• Clean hydrogen production credits (not in AEO2023 but will be reflected 

once NEMS implements a hydrogen module)

• Enhancement to carbon capture, utilization, and storage (CCUS) tax credits 

(not in AEO2023, but will be reflected once NEMS implements CCUS)

• $5.8 billion in financial assistance for clean energy investment for energyintensive industries (not in AEO2023 but will review for potential inclusion in 

future AEOs)

AEO2023 Macro-Industrial Working Group 

August 30, 2022 19

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Industrial coal consumption is lower in AEO2023

• Decrease in steam coal 

consumption from:

– Quarterly Coal Report benchmarking

– New assumption that no new coalfired cement kilns will be built

• Decrease in met coal 

consumption because steel 

submodule changes increase use 

of electric arc furnaces and 

decrease use of basic oxygen 

furnaces

AEO2023 Macro-Industrial Working Group 

August 30, 2022

Note: Graph includes steam coal and met coal consumption

20

Total industrial coal consumption

quadrillion British thermal units

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2020 2030 2040 2050

AEO2022

AEO2023 preliminary

projections

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

Source: U.S. Energy Information Administration, Annual Energy Outlook 2022, Annual Energy Outlook 2023 preliminary run
Combined heat and power (CHP)

• Changes primarily from preliminary 

historical data update (still subject to 

change)

• Inflation Reduction Act extends CHP 

investment tax credit through 2024, but 

also allows for bonus credits

– Baseline credit: 10% (used in AEO2023)

– If meet wage & apprenticeship requirements: 30% 

– If meet domestic content requirements: +8%

– If sited in an energy community: +8%

• Bonus credits not in AEO2023; do any of 

you plan to take advantage of them?

AEO2023 Macro-Industrial Working Group 

August 30, 2022

Source: U.S. Energy Information Administration, Annual Energy Outlook 2022, Annual Energy Outlook 2023 preliminary run

21

Combined-heat-and-power electricity generation

billion kilowatthours

100

125

150

175

2020 2030 2040 2050

AEO2022

AEO2023 preliminary

history projections

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Updated ethane and propane prices projection

• Prices spike in the short term 

following disruptions in the oil 

and natural gas markets

• Prices remain higher in the 

long term compared to last 

year

• All ethane produced will go to 

domestic ethylene cracking by 

about 2030 (no more exports), 

resulting in higher ethane

AEO2023 Macro-Industrial Working Group 

August 30, 2022

Source: U.S. Energy Information Administration, Annual Energy Outlook 2022, Annual Energy Outlook 2023 preliminary run

22

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

0.00

4.00

8.00

12.00

16.00

20.00

2020 2030 2040 2050

propane AEO2022

propane AEO2023

ethane AEO2022

ethane AEO2023

Ethane and propane price

2021 dollars per million British thermal units

projections
Longer-term modeling and data enhancements

• Update technology parameters for process flow industries (iron & steel, 

cement & lime, pulp & paper, aluminum, and glass)

• Enhance parts of chemical industry (greater detail, prepare to track hydrogen)

• Consider more process emissions (bulk chemicals, iron & steel, others?)

• Benchmark electricity by industry to data from the Annual Survey of 

Manufactures

• Add more low-carbon functionality (hydrogen, electrification, carbon capture) 

• Restructure the industrial module more broadly: convert some parts into 

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

AEO2023 Macro-Industrial Working Group 

August 30, 2022 23

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
Questions or comments?

AEO2023 Macro-Industrial Working Group 

August 30, 2022 24

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.
AEO economic activity and STEO macroeconomic projections

AEO2023 Macro-Industrial Working Group 

August 30, 2022 25

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

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.

• 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 (202) 287-6077

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

• Kelly Perl (senior analyst) Kelly.Perl@eia.gov (202) 586-1743

EIA industrial consumption modeling
26

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 (202) 287-6077

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

• Kelly Perl (senior analyst) Kelly.Perl@eia.gov (202) 586-1743

AEO2023 Macro-Industrial Working Group 

August 30, 2022

WORKING GROUP PRESENTATION FOR 

DISCUSSION PURPOSES. DO NOT QUOTE OR 

CITE BECAUSE RESULTS ARE SUBJECT TO CHANGE.