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

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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

SLIDE 1

www.eia.gov

U.S. Energy Information Administration

Independent Statistics & Analysis

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.

SLIDE 2

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 2

Preliminary results. Do not disseminate.

SLIDE 3

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 3

Preliminary results. Do not disseminate.

SLIDE 4

Industrial results Excludes Refining

Industrial Working Group Meeting #2 Washington, DC | September 22, 2016 4

Preliminary results. Do not disseminate.

SLIDE 5

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.

SLIDE 6

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.

SLIDE 7

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

5 10 15 20 25 30 35 2012 2020 2030 2040 2050 Energy Consumption by Fuel

Coal

NaturalGas

Purchased Electricity

Petroleum

quadrillion Btu

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.

SLIDE 8

Bulk chemicals, Paper, Food &

Steel largest CHP producers in IDM

CHP generation slightly higher than

AEO2016 until about 2030

Greatest increase in natural gas-

fired 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

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.

SLIDE 9

Individual industry results

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

SLIDE 10

Bulk chemical shipments generally

higher than AEO2016; no post- 2025 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.

SLIDE 11

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

2,000 4,000 6,000 8,000 2012 2020 2030 2040 2050

AEO2017

HGL

Petrochemical

NaturalGas

trillion Btu

2,000 4,000 6,000 8,000 2012 2020 2030 2040 2050

AEO2016

trillion Btu

SLIDE 12

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

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

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.

SLIDE 13

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

400 800 1,200 1,600 2012 2020 2030 2040 2050

Iron & Steel Energy Consumption AEO2017 & AEO2016

Ref2017.0920a AEO2016 Reference Case

trillion Btu

400 800 1,200 1,600 2012 2020 2030 2040 2050

AEO2017 Iron & Steel Energy Consumption by Fuel

Coal NaturalGas Purchased Electricity

trillion Btu

SLIDE 14

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

20 40 60 80 100 120 140 160 2012 2020 2030 2040 2050

BF/BOF & EAF Output

EAF BF/BOF

utput in million tons

Preliminary results. Do not disseminate.

SLIDE 15

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

2 4 6 8 10 12 14 2012 2020 2030 2040 2050

DRI (Direct Reduced Iron) Output

Ref2017.0920a AEO2016 Reference Case

utput in million tons

Preliminary results. Do not disseminate.

SLIDE 16

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.

SLIDE 17

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 17