Analysis & Projections

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Assumptions to AEO2011

Release Date: July 8, 2011   |  Next Release Date: June 2012   |   Report Number: DOE/EIA-0554(2011)

Introduction

This report presents the major assumptions of the National Energy Modeling System (NEMS) used to generate the projections in the Annual Energy Outlook2011 [1] (AEO2011), including general features of the model structure, assumptions concerning energy markets, and the key input data and parameters that are the most significant in formulating the model results. Detailed documentation of the modeling system is available in a series of documentation reports [2].

The National Energy Modeling System

The projections in the AEO2011 were produced with the (NEMS), which is developed and maintained by the Office of Energy Analysis of the Energy Information Administration (EIA) to provide projections of domestic energy-economy markets in the long term and perform policy analyses requested by decisionmakers at the White House, U.S. Congress, offices within the Department of Energy (DOE), including DOE Program Offices, and other government agencies. The Annual Energy Outlook (AEO) projections are also used by analysts and planners in other government agencies and outside organizations.

The time horizon of NEMS is approximately 25 years, the period in which the structure of the economy and the nature of energy markets are sufficiently understood that it is possible to represent considerable structural and regional detail. Because of the diverse nature of energy supply, demand, and conversion in the United States, NEMS supports regional modeling and analysis in order to represent the regional differences in energy markets, to provide policy impacts at the regional level, and to portray transportation flows. The level of regional detail for the end-use demand modules is the nine Census divisions. Other regional structures include production and consumption regions specific to oil, natural gas, and coal supply and distribution, the North American Electric Reliability Council (NERC) regions and subregions for electricity, and the Petroleum Administration for Defense Districts (PADDs) for refineries. Maps illustrating the regional formats used in each module are included in this report. Only selected regional results are presented in the AEO2011, which predominately focuses on the national results. Complete regional and detailed results are available on the EIA Analyses and Projections Home Page (http://www.eia.gov/forecasts/aeo/).

For each fuel and consuming sector, NEMS balances the energy supply and demand, accounting for the economic competition between the various energy fuels and sources. NEMS is organized and implemented as a modular system (Figure 1).

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Figure f. Map of 48 major shale basins in 32 countries.Figure 1. National Energy Modeling System