Electricity generators are expected to set a record for natural gas use this winter, reflecting the continued addition of new gas-fired power plants to replace coal units.
With about 7,000 megawatts of new gas-fired units estimated to have come online so far in 2019, the power sector will demand 27 billion cubic feet per day of gas — about a 5% increase compared with last winter, according to a forecast released yesterday by the Natural Gas Supply Association.
NGSA members include Exxon Mobil Corp., BP PLC, Chevron Corp., ConocoPhillips and Anadarko Petroleum Corp., among other major energy firms.
Overall, gas supply and demand are projected to reach historic highs this winter.
Record use of the fuel will be driven by liquefied natural gas exports, pipeline exports to Mexico and demand growth in the U.S. electric sector, which is on track to be the greatest contributor to domestic demand for gas this winter, NGSA said.
The trade group said record production will easily satisfy demand and that the combination of abundant supplies, warmer weather and healthy levels of gas storage will put downward pressure on gas prices compared with last winter.
“We’ve witnessed amazing growth of nearly 40% in production in the six years since 2013,” said Orlando Alvarez, chairman of NGSA and head of BP’s North American gas marketing and trading business.
He credited the “shale revolution” with making gas production more efficient but also contributing to significant reductions in carbon dioxide emissions.
Burning natural gas for power production produced greenhouse gases at a much lower rate than coal.
NGSA’s winter outlook is the first in a series of forecasts that are released early each fall and serve as indicators about electricity and natural gas market trends.
The Federal Energy Regulatory Commission will release its annual winter energy market assessment at its monthly meeting on Oct. 17. That report also typically highlights natural gas supply, demand and expected pricing by region of the country.
Source: E and E News
