U.S. Natural Gas Consumption
EIA expects that natural gas consumption will average 69.9 billion cubic feet per day (Bcf/d) in 2012, an increase of 3.3 Bcf/d (4.9 percent) from 2011 and an upward revision of 0.5 Bcf/d from last month's Outlook. EIA expects that 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 grows by 21 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 at 31.2 Bcf/d in the third quarter of 2012, 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 71.1 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 near-normal weather next winter drives 2013 increases in residential and commercial consumption of 7.7 percent and 4.5 percent, respectively. Although projected natural gas burn in the electric power sector declines by 1.9 percent from 2012, it remains at historically high levels in 2013.
U.S. Natural Gas Production and ImportsTotal marketed production of natural gas grew by 4.8 Bcf/d (7.9 percent) in 2011. This strong growth was driven in large part by increases in shale gas production. EIA expects continued year-over-year growth in 2012, though not as strong as the previous year (U.S. Natural Gas Production and Imports Chart). This month's Outlook revises upward the forecast for marketed production for 2012, partially reflecting upward revisions to historical data for the first few months of the year. EIA, however, expects a small drop in production in the coming months, reflecting the decline in rigs since October 2011. According to Baker Hughes, the natural gas rig count was 542 as of July 6, 2012, up slightly from last week, which was the lowest rig count since 1999. EIA's production survey indicates natural gas marketed production fell between February and March 2012, but rebounded in April. Declining production from less-profitable "dry" natural gas plays such as the Haynesville Shale is offset by growth in production from liquids-rich natural gas production areas such as the Eagle Ford and wet areas of the Marcellus Shale, and associated gas from the growth in domestic crude oil production.
Based on the outlook from National Oceanic and Atmospheric Administration for the current Atlantic hurricane season, EIA estimates a 70-percent probability that total shut-in natural gas production in the GOM during the upcoming hurricane season (June through November) will fall somewhere between 5.8 and 16.2 Bcf, with a median outcome of 9.5 Bcf (an average of 0.05 Bcf/d over the 6 months; see the 2012 Outlook for Hurricane-Related Production Outages in the Gulf of Mexico)....MORE