EIA Expects Gas Consumption to Rise, USA

The U.S. Energy Information Administration (EIA) said it expects that natural gas consumption will average 69.8 billion cubic feet per day (Bcf/d) in 2012, an increase of 3.1 Bcf/d (4.7 percent) from 2011.

Large gains in electric power use in 2012 more than offset declines in residential and commercial use. Projected consumption of natural gas in the electric power sector averages 25.4 Bcf/d in 2012, 22 percent higher than in 2011, primarily driven by the improved relative cost advantages of natural gas over coal for power generation in some regions.

Consumption in the electric power sector during 2012 was 35.1 Bcf/d in July 2012, when electricity demand for air conditioning was highest.

Projected total natural gas consumption decreases by 0.2 Bcf/d (0.2 percent) in 2013. Expected declines in the electric power sector offset increases in residential, commercial, and industrial consumption. A forecast of near-normal weather during the upcoming winter (i.e., colder than last year’s abnormally warm winter) drives 2013 increases in residential and commercial consumption of 11.5 percent and 10.3 percent, respectively.

Although projected higher natural gas prices contribute to a 10.4-percent decline in forecast natural gas consumption in the electric power sector in 2013, consumption in the power sector next year is still expected to be about 1.9 Bcf/d higher than 2011 levels and high by historical standards.

Liquefied natural gas (LNG) imports are expected to fall by about one-half in 2012 from the year before. EIA expects that an average of about 0.5 Bcf/d will arrive in the United States (mainly at the Elba Island terminal in Georgia and the Everett terminal in New England) both in 2012 and 2013, either to fulfill long-term contract obligations or to take advantage of temporarily high local prices due to cold snaps and disruptions.

Higher prices for LNG, particularly in Asian markets, have made the United States a market of last resort for LNG suppliers.

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LNG World News Staff, October 15, 2012; Image: EIA