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    US Agency Sees Rising Gas Use


Higher gas for power generation will help push emissions lower, Energy Information Administration says

by: Dale Lunan

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US Agency Sees Rising Gas Use

The US Energy Information Administration (EIA), in its July 9 Short Term Energy Outlook (Steo), is forecasting a 9.6% increase in US dry natural gas production this year and continuing weakness in benchmark natural gas prices.

The EIA is forecasting dry natural gas production in the US will average a record 91.3bn ft3/day in 2019, up from the previous record of 83.3bn ft3/day set in 2018. And it’s forecasting another 1.4bn ft3/day increase in 2020.

North American natural gas prices, however, will remain in the doldrums, the agency said, with the 2H 2019 average at Henry Hub forecast at $2.50/mn Btu, down $0.29/mn Btu from its June Steo forecast of $2.79/mn Btu. Henry Hub is forecast to recover some of the lost ground in 2020, when it will average $2.77/mn Btu, the EIA says.

“The lower forecast reflects recent price declines and EIA’s updated assessment of US drilling activity and average well productivity,” the agency said.

Total utility-scale power generation from natural gas, the EIA suggests, will rise from 35% in 2018 to 38% in 2019 before falling back slightly in 2020. The share of power generation by non-hydro renewables – which reached 10% in 2018 – will continue to increase over the next couple of years, to 11% this year and 13% in 2020.

Growing gas and renewables use in power production, the EIA predicts, should contribute to a 2.2% reduction in US CO2 emissions this year and a 0.7% reduction in 2020.