Natural Gas Market Module - NEMS Documentation
July 2025
Introduction
The Natural Gas Market Module (NGMM) is the component of the National Energy Modeling System (NEMS) that represents the North American natural gas transmission and distribution system. We developed the NEMS as the third in a series of computer-based energy-economy modeling systems. EIA and its predecessor, the Federal Energy Administration, have used NEMS to analyze and project U.S. domestic markets to provide 25–30 year projections and to analyze a broad range of energy issues at both national and regional levels. Although the NEMS was first used in 1992, the model is updated each year; updates in individual modules range from simple historical data updates to completely replacing submodules. The NGMM was an entirely new model we incorporated into the NEMS for the Annual Energy Outlook 2018, replacing the Natural Gas Transmission and Distribution Module (NGTDM).
Documentation purpose and scope
This report provides a reference document for model analysts, users, and the public that defines the objectives of the Natural Gas Market Module (NGMM) in the NEMS. This report also fulfills EIA’s legal obligation to provide adequate documentation in support of our models under Public Law 93-275, Federal Energy Administration Act of 1974, Section 57(B)(1) (as amended by Public Law 94-385, Energy Conservation and Production Act).
- Describe NGMM’s basic design
- Provide details on the methodology employed
- Detail the model inputs, outputs, and key assumptions
Because we first incorporated the NGMM into the NEMS for the Annual Energy Outlook 2018, the documentation also describes our decision to build a new model in the NEMS to represent natural gas markets and the differences between the NGMM and its predecessor.
This report is also a reference document for how the NGMM uses Advanced Integrated Multidimensional Modeling Software (AIMMS)1 and AIMMS best practices for the NEMS. The NGMM is the second module (after the Coal Market Module) we developed and implemented in the NEMS using the AIMMS modeling language and user interface, and we expect to develop all future optimization models in AIMMS.2 Therefore, this documentation report uses AIMMS terminology to describe in detail the most efficient, flexible, and transparent techniques and methods employed in the NGMM. This aspect of the report is particularly important to ensure the reproducibility of results, given the complexity of NEMS runs and the exchange of data between the NEMS Fortran code, the NGMM AIMMS code, and various external files.
Model summary
The NGMM models the transmission, distribution, and pricing of natural gas in the NEMS. The model code is written in AIMMS and is a quadratic program that maximizes consumer plus producer surplus, minus transportation costs, subject to linear mass balance and capacity constraints. For all months in a year, the NGMM determines the production, flows, and prices of natural gas in a state-level representation of the U.S. pipeline network3 and a regional-level representation of the Canada’s and Mexico’s pipeline network , connecting domestic and foreign supply regions with demand regions (Figure 1.14). End-use natural gas consumption by sector, storage, and liquefied natural gas (LNG) export terminals are all integrated into the network by demand region. The NGMM projects:
- Lease fuel
- Plant fuel
- Pipeline fuel
- Fuel used for liquefaction
- LNG export capacity builds
- Pipeline capacity expansions
- Distributor tariffs at the delivered price of natural gas to domestic consumers
Data source: U.S. Energy Information Administration
Documentation organization
The document provides a framework for understanding how the natural gas market is represented in our long-term U.S. energy market projections. Subsequent chapters of this report provide:
- Overview of natural gas market representation in the NEMS (Chapter 2)
- NGMM model structure, design, and mathematical formulation (Chapter 3)
- NGMM input data preprocessing routines, including model initialization in the first year (Chapter 4)
- NGMM output data post-processing routines and reporting to other NEMS modules (Chapter 5)
- NGMM assumptions, inputs, and outputs (Chapter 6)
A number of appendices support the main body of the report:
- Appendix A: Model abstract
- Appendix B: References
- Appendix C: Table relating the variable names used in the documentation to the specific variable, or identifier, used in the model code
- Appendix D: Table relating the equations presented in the documentation to the relevant procedure in the code
- Appendix E: Table relating the input data parameters in the model code and the data input files from which they are read and where detailed descriptions of the input data (including variable names, definitions, sources, units and derivations) can be found5
- Appendix F: Table that Identifies all global data passed between other NEMS modules and the NGMM, as well as a brief description of the variable and the related module, where applicable
- Appendix G: The derivation of all empirical estimations used in the NGMM
Notes and sources
1 AIMMS Development Environment is software that integrates the AIMMS mathematical modeling language, a graphical user interface, and numerical solvers. It is used to design and build optimization models and includes diagnostic tools as well as the ability to construct graphical reports of model results. Available AIMMS documentation includes AIMMS—The Language Reference and AIMMS—The User’s Guide.
2 AIMMS, The U.S. Department of Energy expands its use of AIMMS for its NEMS Electricity Market Module
3 Alaska’s natural gas market is modeled in the NGMM independent of the integrated network.
4 Blue circles represent transshipment nodes. Arcs represent pipeline capacity existing between nodes in 2020.
5 The NGMM data files are available on request from the model contact. Alternatively, you can download an archived version of the NEMS model (source code and data files).