US expects higher natural gas production in 2022
The US federal government said June 8 it expected dry natural gas production in 2022 to increase by about 1% from the second half of the year.
The US Energy Information Administration (EIA), in its Short-Term Energy Outlook, said dry natural gas production had recovered by 6bn ft3/d from weather-related disruptions in February to average 92.3bn ft3/d in March.
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That level is expected to increase to an average of 92.9bn ft3/d in the second half of the year and reach 93.9bn ft3/d in 2022.
In its drilling productivity report from May, EIA said natural gas production would actually decrease on a short-term basis, from 83.62bn ft3/d on average for May to 83.57bn ft3/d in June. Gains were only expected from the Haynseville and Permian basins. The next update is due June 14.
On consumption, EIA said it expected to see a slight decline from last year, for an average of 82.9bn ft3/d. Despite president Joe Biden’s effort to accelerate the economy down a cleaner pathway, EIA said an elevated price for natural gas this year has pushed some electric power generators to switch to coal. That trend continues into next year, when US natural gas consumption is expected to average 82.8bn ft3/d.
The spot price for natural gas at Henry Hub averaged $2.91/mn Btu in May, up 9.3% from the month prior. EIA forecasts Henry Hub will average $3.07/mn Btu for the year, up 51% from 2020 levels. Expecting more domestic natural gas production next year, EIA expects the price for natural gas will average $2.93/mn Btu in 2022.