International Energy Module - NEMS Documentation

August 2025

Introduction

Purpose of the report
This report documents the objectives, analytical approach, and development of the National Energy Modeling System’s (NEMS) International Energy Module (IEM). It catalogues and describes the model assumptions, computational methodology, parameter estimation techniques, and model source code that are used to generate projections in the Reference case and side cases, as well as other scenarios.

The document serves three purposes. First, it is a reference document that provides a detailed description for model analysts, users, and the public. Second, it meets the legal requirement for EIA to provide adequate documentation in support of its models (Public Law 93-275, section 57.b.1). Third, it helps to ensure that model development is consistent by providing documentation from which energy analysts can undertake model enhancements, data updates, and parameter refinements for future projects.

Model summary

The IEM, working with the Liquid Fuels Marketing Module (LFMM), simulates the interaction between U.S. and global petroleum markets. It uses assumptions of economic growth and expectations of future U.S. and world crude oil¹ production and consumption to estimate the effects of changes in U.S. liquid fuels markets on the international petroleum market. For each year of the projection period, the IEM:

• Projects the Brent crude oil price
• Provides supply curves for world crude oil and each foreign-imported crude oil type
• Includes exogenous assumptions on U.S. crude oil exports
• Provides petroleum products demand curves for refinery region 9 (Maritime Canada and Caribbean region) (Figure 1)
• Provides petroleum products import supply curves and export demand curves
• Generates a worldwide oil supply-demand balance with regional detail

Model archival citation
This documentation refers to the NEMS International Energy Module as archived for the Annual Energy Outlook 2025 (AEO2025).

Organization of this report
Chapter 2 of this report, Model Purpose, identifies the analytical issues the IEM addresses, the general types of activities and relationships, its primary inputs and outputs, and its interactions with other NEMS modules.

Chapter 3 describes in greater detail the rationale behind the model design, the modeling approach chosen for each IEM component, and the assumptions used in the model development process, citing theoretical or empirical evidence to support those choices.

Chapter 4 details the model structure, using graphics and text to illustrate model flows and key computations.

The appendices to this report provide supporting documentation for the input data and parameter files:

• Appendix A lists and defines the input data used to generate parameter estimates and endogenous projections, along with the outputs of most relevance to the NEMS system.
• Appendix B contains a mathematical description of the computational algorithms, including the complete set of model equations and variable transformations.
• Appendix C is a bibliography of reference materials used in the development process.
• Appendix D provides the model abstract, and Appendix E discusses data quality and estimation methods.

Notes and sources
¹ Crude oil includes other liquids like condensate that are processed/refined like crude oil.

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