U.S gas consumption expected to fall 0.4% in 2021
By Keefe Borden06 April 2021
Consumption of natural gas in the U.S. will average 82.9 billion cubic feet per day (Bcf/d) in 2021, down 0.4% from last year, according to the U.S. Energy Information Agency. In its most recent short-term energy outlook, the agency said that stronger gas prices this year will likely cause consumption from electric power generators to fall.
The EIA said it expected the share of electric power generated from natural gas in the U.S. will average 36% in 2021 and 35% in 2022, down from 39% in 2020.
Despite the expected decline in demand for gas from power producers, the agency said that the use of gas among residential and commercial consumers in 2021 will increase by 1.1 Bcf/d and 1.4 Bcf/d respectively. The increase in demand outside of the power sector is caused by expanding economic activity and colder temperatures.
Looking farther ahead, the agency said it expected U.S. gas consumption to average 82.1 Bcf/d in 2022.
Natural gas inventories in the U.S. ended March 2021 at nearly 1.8 Tcf, down 2% from the five-year average from 2016 through 2020. The U.S. market saw more inventories withdrawn from storage than average because of cold temperatures in February and low natural gas production.
Injections of gas into storage are expected to outpace the five-year average this season because of rising gas production and lower gas consumption for power generation. The agency predicted that gas inventories will end the 2021 injection season, usually around the end of October, at more than 3.7 Tcf, on par with the five-year average.
The EIA also forecast that dry gas production will average 91.4 Bcf/d in 2021, about the same as the 2020 average. It predicted that dry gas production will fall to a low of 90.8 Bcf/d in May before steadily increasing for the rest of the year and reaching a high of 92.4 Bcf/d in November.
The stronger production in 2021 reflects stronger prices for both oil and gas, Additional oil production, particularly in the Permian Basin, is expected to result in additional associated gas production, the agency said.