AEO2017 Industrial Working Group meeting 2: Preliminary results - PowerPoint PPT Presentation

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

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 Preliminary results. Do not disseminate. 2 Washington, DC | September 22, 2016

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

Industrial results Excludes Refining Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 4 Washington, DC | September 22, 2016

AEO2017 Industrial Energy consumption slightly lower than AEO2016 consumption Industrial Energy consumption, 2012-2050 quadrillion Btu 32 30 28 26 24 Ref2017.0920a 22 Ref2017.0920a_nocpp 20 AEO2016 Reference Case 18 2012 2015 2020 2025 2030 2035 2040 2045 2050 EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Preliminary results. Do not disseminate. Industrial Working Group Meeting #2 5 Washington, DC | September 22, 2016

AEO2017 Industrial natural gas consumption about the same as AEO2016 consumption until 2030 Industrial Natural Gas consumption, 2012-2050 quadrillion Btu 12 11 10 9 Ref2017.0920a Ref2017.0920a_nocpp 8 AEO2016 Reference 7 Case 6 2012 2015 2020 2025 2030 2035 2040 2045 2050 EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 6 Washington, DC | September 22, 2016

Natural gas share increases slightly to 40% by 2030; Bulk chemicals energy consumption expands Energy Consumption by Fuel Energy Consumption by Industry quadrillion Btu quadrillion Btu 35 35 30 30 Purchased Electricity 25 25 Nonmanufacturing 20 Coal 20 MBD End Use 15 15 Bulk Chemicals Feedstocks NaturalGas 10 10 Bulk Chemicals Heat & Power 5 Food 5 Process Iron & Steel Petroleum Flow Paper 0 0 2012 2020 2030 2040 2050 2012 2020 2030 2040 2050 EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 7 Washington, DC | September 22, 2016

CHP generation slightly higher in AEO2016 vs. AEO2016 CHP generation AEO2017 & • Bulk chemicals, Paper, Food & AEO2016 Steel largest CHP producers in billion kWh 250 IDM 200 • CHP generation slightly higher than 150 AEO2016 until about 2030 100 • Greatest increase in natural gas- Ref2017.0920a fired generation 50 AEO2016 Reference Case 0 • Higher bulk chemicals shipments 2012 2020 2030 2040 2050 may explain EXCLUDES REFINING. Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 8 Washington, DC | September 22, 2016

Individual industry results 9 Industrial Working Group Meeting #2 Washington, DC | September 22, 2016

AEO2017 Industrial bulk chemicals consumption lower than AEO2016 as a result of feedstocks Bulk Chemicals Energy Consumption AEO2017 & AEO2016 • Bulk chemical shipments generally higher than AEO2016; no post- trillion Btu 12,000 2025 decline 10,000 • Heat & Power energy intensity declines over time because of 8,000 Ref2017.0920a energy efficiency 6,000 AEO2016 Reference Case • Feedstocks lower in AEO2017 – possible benchmarking effect 4,000 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 10 Washington, DC | September 22, 2016

AEO2017 Industrial bulk chemicals liquid feedstocks lower than AEO2016; natural gas higher AEO2017 AEO2016 trillion Btu trillion Btu 8,000 8,000 6,000 6,000 NaturalGas 4,000 4,000 Petrochemical HGL 2,000 2,000 0 0 2012 2020 2030 2040 2050 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case 11 Industrial Working Group Meeting #2 Washington, DC | September 22, 2016

Paper energy consumption for AEO2017 higher than AEO2016; shipments largely the difference Paper Energy Consumption by Fuel Paper Energy consumption AEO2017 AEO2017 & AEO2016 trillion Btu trillion Btu 3,000 3,000 Purchased Electricity 2,500 2,500 2,000 2,000 Renewables 1,500 1,500 Ref2017.0920a 1,000 1,000 Coal AEO2016 Reference 500 Case 500 NaturalGas 0 0 2012 2020 2030 2040 2050 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 12 Washington, DC | September 22, 2016

Steel energy consumption for AEO2017 generally lower AEO2016; again, shipments largely the difference AEO2017 Iron & Steel Energy Iron & Steel Energy Consumption by Fuel Consumption AEO2017 & AEO2016 trillion Btu trillion Btu 1,600 1,600 Purchased Electricity 1,200 1,200 800 Coal 800 Ref2017.0920a 400 400 AEO2016 NaturalGas Reference Case 0 0 2012 2020 2030 2040 2050 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case 13 Industrial Working Group Meeting #2 Washington, DC | September 22, 2016

EAF shares increase over time, nearly 75% of total steel output by 2050 • Steel output does not cross 100 BF/BOF & EAF Output million ton mark until late 2030s output in million tons 160 140 • EAF share increases over time, 120 especially last 10 years 100 – 61% in 2012 80 – 68% in 2040 60 EAF – 73% in 2050 40 20 BF/BOF • Need to explain last 10 year surge 0 in output 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 14 Washington, DC | September 22, 2016

Direct Reduced Iron (DRI) output lower than last year because output lower than originally thought • DRI output assumed exogenous in DRI (Direct Reduced Iron) model Output output in million tons • Lower capacity in 2015; capacity 14 bump in 2022 12 10 Ref2017.0920a • Differing use assumptions 8 AEO2016 Reference Case – BOF uses 10% of DRI output in 6 AEO2017; at least 50% in AEO2016 4 – EAF now unconstrained 2 • Lower DRI visibly increases coal 0 use 2012 2020 2030 2040 2050 Source: NEMS runs AEO2017.0920a, AEO2017.0920_nocpp and AEO2016 Reference case Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 15 Washington, DC | September 22, 2016

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/ Industrial Working Group Meeting #2 Preliminary results. Do not disseminate. 16 Washington, DC | September 22, 2016

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