API Study – A World Without Fossil Fuels?

What would a world without fossil fuels look like in the next two decades? We at OnLocation Inc. are excited to see our work featured in the recently released study “The Impacts of Restricting Fossil Fuel Energy Production.” The American Petroleum Institute (API) sponsored this study to spotlight the implications of a future in which no new fossil fuel production development occurs in the U.S.  This scenario was modeled after the so-called Keep It In The Ground (KIG) effort which has evolved from its initial start as a movement to halt oil and gas development on public lands in the U.S. into a climate movement.

This recently published report explores the detrimental effect of fossil fuel restrictions on GDP, domestic production, CO₂ emissions, petroleum imports, and several additional metrics.  Energy-economic modeling was used to show how rising electricity and natural gas prices and a lower level of economic activity due to these factors would lead to unprecedented job losses, especially in states like Texas, West Virginia, and Wyoming that are energy industry-dependent.  

API commissioned OnLocation Inc. to perform this study using the National Energy Modeling System (NEMS) that is maintained by the Energy Information Administration (EIA) and is widely believed to be the most trusted integrated energy model for policy analysis.  To perform this study, OnLocation Inc. made changes to the NEMS model and data inputs to reflect the assumptions for the KIG scenario such as the effect of a complete ban on hydraulic fracturing technology in drilling for oil and gas. Outputs from KIG-NEMS were then used by Management Information Systems, Inc to develop state level job impacts.

We recognize that the model was pushed significantly given the extreme nature of the scenario assumptions. OnLocation Inc. did not attempt to modify the model structure to allow more flexibility in the way that it responds to the KIG assumptions.  Despite the model operating outside the range in which it is generally used, we believe that the result of the KIG scenario is directionally correct and provides a potential range of outcomes. 

This API study, as well as earlier modeling performed for the United States Mid-Century Strategy for Deep Decarbonization, showcase OnLocation Inc.’s expertise with complex integrated energy-economic modeling systems such as NEMS.

Contact us to learn about the NEMS model and how OnLocation can help you explore issues related to the energy system.