Highlights Data

US natural gas supply, demand set records in 2012: US

FERC staff

The year 2012 was one for the record books, with

US natural gas production reaching an all-time high and

average gas demand hitting 70 Bcf/d, the highest level on

record, staff at the US Federal Energy Regulatory Commission

said Thursday. At the same time, natural gas prices

fell to a 10-year low last year, with the spot price at

Henry Hub averaging $2.74/MMBtu, down 31% from

2011, staff said at the commission’s monthly meeting.

“Contributing to the price decrease was a 5%

growth in US natural gas production, a 10% drop in residential

and commercial natural gas demand due to one of

the warmest winters on record in the first quarter of 2012,

and high storage levels,” staff said. Natural gas demand

for power generation grew to a record 25 Bcf/d in 2012, a

21% increase from 2011, FERC staff said. “For the first

time ever, natural gas used for power generation was

greater than the combined residential and commercial gas

demand.” Pipeline exports of gas to Mexico increased

24% in 2012 and exports of Marcellus shale gas to Canada

started in the last half of the year, staff said.

In response to a question from Commissioner John

Norris, staff said exports to Mexico are on par with the

capacity of Cheniere Energy’s Sabine Pass liquefied natural

gas export project under construction in Louisiana.

“When I look at exports to Mexico, 1.7 Bcf/d is very close

to Cheniere’s 2 Bcf/d export capacity,” Omar Cabrales of

FERC’s Office of Enforcement said. “Low natural gas

prices have been largely responsible for relatively low

electricity prices since the beginning of 2009, but lower

electric demand as a result of continued weak economic

activity and energy efficiency were also contributors,”

staff said. Electricity sales dropped by 1.7% in 2012 compared

to 2011, staff said.

“Demand was down across the nation due to three

primary factors: a decrease in residential demand, lack of

demand growth in the commercial and industrial sectors,

and increased energy efficiency,” according to FERC staff.