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EIA expects increasing consumption of natural gas

Published by , Senior Editor
Hydrocarbon Engineering,

Based on the US Energy Information Administration’s (EIA) September ‘Short-Term Energy Outlook’, industrial sector natural gas consumption is expected to rise throughout 2021 and to exceed pre-pandemic 2019 levels.

The EIA forecasts the growth to continue into 2022, and natural gas delivered to industrial consumers will average 23.8 billion ft3/d that year. If realised, this amount would be near the current record high for annual industrial natural gas consumption set in the early 1970s.

Many industrial processes have limited or no alternatives to natural gas for use as both fuel and feedstock, making industrial natural gas consumption relatively insensitive to short-term price fluctuations. Some value-added industrial products such as ammonia, methanol, and hydrogen that are produced from natural gas remain economically competitive even when natural gas prices are relatively high.

US industrial natural gas consumption averaged 22.9 biillion ft3/d in the first half of 2021, according to the EIA’s ‘Natural Gas Monthly’. Natural gas consumption fell in the US industrial sector during 2020 when a decline in US economic activity led to a decline in output among industries that consume natural gas, such as the metals, petroleum and coal products, paper, and chemicals industries.

In its latest ‘Short-Term Energy Outlook’, the EIA expects natural gas consumption in the US industrial sector to average 23.5 billion ft3/d in the second half of this year and 23.2 billion ft3/d for 2021. If realised, this amount of industrial natural gas consumption would exceed the 2019 average of 23.1 billion ft3/d and mark the most US industrial natural gas consumption since 1997.

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