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Annual Energy Outlook 2016

Full Release Date: September 15, 2016   |  Next Early Release Date:  January 2017   |  full report


The Annual Energy Outlook 2016 (AEO2016), prepared by the U.S. Energy Information Administration (EIA), presents long-term projections of energy supply, demand, and prices through 2040. The projections, focused on U.S. energy markets, are based on results from EIA's National Energy Modeling System (NEMS). NEMS enables EIA to make projections under alternative, internallyconsistent sets of assumptions. The analysis in AEO2016 focuses on the Reference case and 17 alternative cases. EIA published an Early Release version of the AEO2016 Reference case (including U.S. Environmental Protection Agency’s (EPA) Clean Power Plan (CPP)) and a No CPP case (excluding the CPP) in May 2016.

The AEO2016 report is a complete edition of the Annual Energy Outlook (AEO) and includes the following major sections:

Executive summary: highlighting key results of the projections

Legislation and regulations: discussing evolving legislative and regulatory issues, including a summary of recently enacted legislation and regulations as incorporated in AEO2016, such as: the EPA’s final rules for the CPP [1]; the California Air Resource Board Zero-Emission Vehicle program [2]; the extension of the production tax credit for wind and 30% investment tax credit for solar [3]; the International Convention for the Prevention of Pollution from Ships [4]; adoption of newly added or modified federal efficiency standards for residential and commercial appliances and equipment; and modifications to existing state renewable portfolio standard or similar laws [5].

Issues in focus: containing discussions of selected energy topics, including the effects of the CPP under alternative implementation approaches; the impact of Phase 2 standards for medium- and heavy-duty vehicles; a discussion that compares the Reference case to alternative cases based on different assumptions about the future course of existing energy policies; the impact on hydrocarbon gas liquids output from changing oil prices and related industrial development; and the sensitivity of steel industry energy consumption to technology choice.

Market trends: complete summary by sector of the projections for energy markets comparing the AEO2016 Reference case and the alternative cases, illustrating uncertainties associated with the Reference case projections for energy demand, supply, and prices. Comparisons with other projections: comparing the AEO2016 Reference case to comparable aspects of projections provided by ExxonMobil, IHS Global Insight, International Energy Agency, ICF, BP p.l.c., National Renewable Energy Laboratory, Energy Ventures Analysis, Inc., and Wood Mackenzie, Inc., among others.

Summary tables for the Reference and alternative cases are provided in Appendixes A through D. Complete tables are available in a table browser on EIA’s website, at http://www.eia.gov/forecasts/aeo/data/browser/. Appendix E provide a short description of the NEMS modules and a complete listing and discussion of the assumptions made for the alternative cases. Appendix F provides a summary of the regional formats, and Appendix G provides a summary of the energy conversion factors used in AEO2016.

The AEO2016 projections are based generally on federal, state, and local laws and regulations in effect as of the end of February 2016. The AEO2016 Reference case assumes that current laws and regulations affecting the energy sector are largely unchanged throughout the projection period (including the implication that laws which include sunset dates are no longer in effect at the time of those sunset dates) [6]. The potential impacts of proposed legislation, regulations, or standards—or of sections of authorizing legislation that have been enacted but are not funded, or for which parameters will be set in a future regulatory process—are not reflected in the AEO2016 Reference case, but some are considered in alternative cases. However, where it is clear that a law or regulation will take effect shortly after the Annual Energy Outlook (AEO) is completed, it may be considered in the projection.

AEO2016 is published in accordance with Section 205c of the U.S. Department of Energy (DOE) Organization Act of 1977 (Public Law 95-91), which requires the EIA Administrator to prepare annual reports on trends and projections for energy use and supply.


Projections by the U.S. Energy Information Administration (EIA) are not statements of what will happen but of what might happen, given the assumptions and methodologies used for any particular scenario. The AEO2016 Reference case projection is a business-as-usual trend estimate, given known technology and technological and demographic trends. EIA explores the impacts of alternative assumptions in other cases with different macroeconomic growth rates, world oil prices, rates of technology progress, and different paths for the implementation of public policy. The main cases in AEO2016 generally assume that current laws and regulations are maintained throughout the projections. Thus, the projections provide policyneutral baselines that can be used to analyze policy initiatives.

While energy markets are complex, energy models are simplified representations of energy production and consumption, regulations, and producer and consumer behavior. Projections are highly dependent on the data, methodologies, model structures, and assumptions used in their development. Behavioral characteristics are indicative of real-world tendencies rather than representations of specific outcomes.

Energy market projections are subject to much uncertainty. Many of the events that shape energy markets are random and cannot be anticipated. In addition, future developments in technologies, demographics, and resources cannot be foreseen with certainty. Many key uncertainties in the AEO2016 projections are addressed through alternative cases.

EIA has endeavored to make these projections as objective, reliable, and useful as possible; however, they should serve as an adjunct to, not a substitute for, a complete and focused analysis of public policy initiatives.


  1. U.S. Environmental Protection Agency, “Standards of Performance for Greenhouse Gas Emissions From New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units” (Washington, DC: October 23, 2015), https://www.federalregister.gov/articles/2015/10/23/2015-22837/standards-of-performance-for-greenhouse-gas-emissionsfrom-new-modified-and-reconstructed-stationary; and U.S. Environmental Protection Agency, “Carbon Pollution Emission
    Guidelines for Existing Stationary Sources: Electric Utility Generating Units” (Washington, DC: October 23, 2015), https://www.federalregister.gov/articles/2015/10/23/2015-22842/carbon-pollution-emission-guidelines-for-existing-stationarysources-electric-utility-generating.
  2. California Environmental Protection Agency, Air Resources Board, “Zero-Emission Vehicle Standards for 2018 and Subsequent Model Year Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles” (Sacramento, CA: August 10, 2014), http://www.arb.ca.gov/msprog/zevprog/zevregs/1962.2_Clean.pdf.
  3. CONGRESS.GOV, “H.R.2029 - Consolidated Appropriations Act, 2016” (Washington, DC: December 18, 2015), https://www.congress.gov/bill/114th-congress/house-bill/2029/text.
  4. U.S. Environmental Protection Agency, “MARPOL Annex VI” (Washington, DC: January 14, 2015), http://www2.epa.gov/enforcement/marpol-annex-vi.
  5. Vermont General Assembly, “H.40 (Act 56), An act relating to establishing a renewable energy standard and energy transformation program” (Montpelier, VT: May 15, 2015), http://legislature.vermont.gov/bill/status/2016/h.40; California Legislative Information, “SB-350 Clean Energy and Pollution Reduction Act of 2015” (Sacramento, CA: October 7, 2015), https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB350. LegiScan, “Hawaii House Bill 623” (Honolulu, HI: June 10, 2015), https://legiscan.com/HI/text/HB623/2015.