The U.S. DOE’s Energy Information Administration latest forecast on natural gas presents some mixed findings for the U.S. industry. The report, Annual Energy Outlook 2011 Early Release Information, finds there will be growing reliance on domestic natural gas, but this will not necessarily translate into higher prices.
The report notes that new shale natural gas discoveries have resulted in a doubling of natural gas resources in the U.S. “The technically recoverable unproved shale gas resource is 827 trillion cubic feet (as of January 1, 2009) in the AEO2011 Reference case, 474 trillion cubic feet larger than in the AEO2010 Reference case, reflecting additional information that has become available with more drilling activity in new and existing shale plays,” the report’s summary finds.
Consumption of natural gas is forecast to rise 16 percent over the next 25 years. “In the AEO2011 Reference case, U.S. natural gas consumption rises 16 percent from 22.7 trillion cubic feet in 2009 to 26.5 trillion cubic feet in 2035. The total in 2035 is about 1.6 trillion cubic feet higher than in the AEO2010 Reference case (24.9 trillion cubic feet).” The EIA notes that natural gas will represent 62 percent of new energy capacity by 2035.
The EIA notes that industrial natural gas demand is recovering, which will reverse the recent trend. “Industrial natural gas demand grows sharply in the near term from 7.3 trillion cubic feet in 2009 to 9.4 trillion cubic feet in 2020. This growth reverses the recent downward trend, as a result of a strong recovery in near-term industrial production, growth in combined heat and power, and relatively low natural gas prices.”
The share of electric generation from natural gas is forecast to go from 23 percent in 2009 to 25 percent in 2035, the report states.
The report finds, however, that natural gas prices (residential, commercial, industrial) will remain relatively flat for the next decade and then rise slowly.
Click to read more: http://www.eia.doe.gov/neic/press/press352.html