USA: EIA Lowers Gas Consumption Forecast

EIA Lowers Gas Consumption Forecast

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 3.2 Bcf/d (4.8 percent) from 2011.

Large gains in electric power use in 2012 will 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 peaks at 31.6 Bcf/d in the third quarter, when electricity demand for air conditioning is highest. As a result of the extreme heat last month, estimated electric-power-sector natural gas consumption during July 2012 averaged 34.8 Bcf/d, 1.8 Bcf/d higher than projected in last month’s Outlook.

Growth in total natural gas consumption slows in 2013, with forecast consumption averaging 70.9 Bcf/d. Growth in 2013 is driven by consumption increases from the residential, commercial, and industrial sectors, as consumption in the electric power sector levels off.

A forecast of near-normal weather next winter drives 2013 increases in residential and commercial consumption of 9.2 percent and 6.4 percent, respectively. Although projected natural gas burn in the electric power sector declines by 3.5 percent from 2012, it remains near historically high levels in 2013.

Liquefied natural gas (LNG) imports are expected to fall by 0.5 Bcf/d (51 percent) in 2012 from the year before. EIA expects that an average of about 0.5 Bcf/d and 0.6 Bcf/d will arrive in the United States (mainly at the Elba Island terminal in Georgia) in 2012 and 2013, respectively, 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 U.S. a market of last resort for LNG.

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LNG World News Staff, August 8, 2012; Image: EIA