US natgas output to decline in 2024, while demand rises to record high, EIA says

US natgas output to decline in 2024, while demand rises to record high, EIA says

By Reuters  July 9, 2024

 

July 9 (Reuters) - U.S. natural gas production will decline in 2024 while demand will rise to a record high, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.

 

EIA projected dry gas production will ease from a record 103.8 billion cubic feet per day (bcfd) in 2023 to 103.5 bcfd in 2024 as several producers reduce drilling activities after gas prices fell to 3-1/2-year lows in February and March.

 

In 2025, EIA projected output would rise to 105.2 bcfd.  The agency also projected domestic gas consumption would rise from a record 89.1 bcfd in 2023 to 89.4 bcfd in 2024 before easing to 89.2 bcfd in 2025.

 

If the projections are correct, 2024 would be the first time output declines since 2020 when the COVID-19 pandemic cut demand for the fuel. It would also be the first time demand increases for four years in a row since 2016.

 

The latest projections for 2024 were higher than EIA's June forecast of 102.1 bcfd for supply and unchanged from the agency's June forecast of 89.4 bcfd for consumption.

 

In Appalachia, the biggest U.S. shale gas basin spanning Pennsylvania, Ohio and West Virginia, output is set to rise from 34.7 in July to 34.8 bcfd in August. Appalachia output hit monthly records of 37.1 bcfd in November and December 2023.

 

The agency forecast average U.S. liquefied natural gas (LNG) exports would reach 12.2 bcfd in 2024 and 14.3 bcfd in 2025, up from a record 11.9 bcfd in 2023.

 

That was higher than EIA's LNG export forecast in June of 12.1 bcfd.

 

The agency projected U.S. coal production would fall from 577.5 million short tons in 2023 to 509.7 million tons in 2024, the lowest since 1964, and 489.5 million tons in 2025, the lowest since 1963, as gas and renewable sources of power displace coal-fired plants.

 

EIA projected carbon dioxide (CO2) emissions from fossil fuels would rise from 4.793 billion metric tons in 2023 to 4.819 billion metric tons in 2024 as all fossil fuel use increases, and 4.825 billion metric tons in 2025 as petroleum use increases.

 

That means carbon emissions were on track to rise in four out of five years through 2025 since dropping to 4.584 billion metric tons in 2020, the lowest since 1983, when the pandemic sapped demand for energy.

 

Carbon emissions also fell in 2023 as power companies burned less coal.

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