Hydrocarbon Supply - NEMS Documentation
July 2026
Overview
HSM is a comprehensive economic analysis module written in Python and a component of the National Energy Modeling System (NEMS) at the U.S. Energy Information Administration (EIA). It projects domestic crude oil and natural gas production for the United States and natural gas production available for import from Canada, providing the upstream supply foundation for Annual Energy Outlook (AEO) energy projections.
HSM evaluates thousands of oil and gas projects each year using discounted cash flow (DCF) analysis, ranking them by profitability and drilling the most economic ones subject to rig, footage, and capital constraints. The model integrates with NEMS to receive price signals from the Liquid Fuels Market Module (LFMM) and Natural Gas Market Module (NGMM) and returns production volumes, well counts, and CO2 capture economics.
HSM succeeded the Oil and Gas Supply Module (OGSM) in AEO2025; see Historical Context on the overview page for lineage and what changed for Outlook readers.
Geographic scope: 13 U.S. oil and gas regions — 7 Lower 48 onshore regions, three Lower 48 offshore regions (Gulf of America, Atlantic, Pacific), and three Alaska regions (onshore north slope, offshore north slope, and other Alaska) — represented at a more granular level as 84 oil and gas districts, plus two Canada regions (East and West) modeled separately.
Commodities: Crude oil, natural gas, natural gas plant liquids (NGPL), and CO2 capture at natural gas processing plants.
Temporal scope: Long-term, annual projections, with the range varying by AEO publication year. For AEO2026, historical data run through 2024 with projections from 2025 through 2050.