USA: EIA Lowers Gas Consumption Forecast

The U.S. Energy Information Administration (EIA) said it expects that natural gas consumption will average 69.5 billion cubic feet per day (Bcf/d) in 2012, an increase of 2.7 Bcf/d (4.1 percent) from 2011 and a downward revision of 0.7 Bcf/d from last month’s Outlook.

This month’s Outlook revises downward the forecast for residential and commercial consumption to reflect a decline in total projected 2012 heating degree-days as reported by the National Oceanic and Atmospheric Administration. EIA expects that large gains in electric power use will offset declines in residential and commercial use.

Projected consumption of natural gas in the electric power sector grows by nearly 20 percent in 2012, primarily driven by the increased relative cost advantages of natural gas over coal for power generation in some regions. Consumption in the electric power sector peaks in the third quarter of 2012, at 30.2 Bcf/d, when electricity demand for air conditioning is highest. This compares with 27.7 Bcf/d during the third quarter of 2011.

Growth in total natural gas consumption slows in 2013, with forecast consumption averaging 71.3 Bcf/d (U.S. Natural Gas Consumption Chart). However, unlike 2012, growth in 2013 is driven by consumption increases from the residential, commercial, and industrial sectors. A forecast of closer-to-normal winter temperatures drives increases in residential and commercial consumption in 2013 of 7.4 percent and 5.7 percent, respectively. Power-sector gas burn remains at historically high levels with little change from 2012 levels.

Liquefied natural gas (LNG) imports are expected to fall by 0.3 Bcf/d (33 percent) in 2012. EIA expects that an average of less than 0.7 Bcf/d will arrive in the United States (mainly at the Everett LNG terminal in New England and the Elba Island terminal in Georgia) 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.

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LNG World News Staff, June 13, 2012; Image: EIA