Record US natural gas demand in 2010 boosts growth outlook - institute
According to the US Energy Information Administration (EIA), the total of more than 22.1 trillion cubic feet of natural gas demand in 2010 was the highest-ever level in the US - exceeding the previous high point established in 2000 by more than 10%
With 2010 setting new records for natural gas demand, the Gas Technology Institute (GTI) - an independent, non-profit R&D organization serving the natural gas industry - sees the coming decade as a period of continued robust growth.
“The economic and clean energy benefits of natural gas are helping to drive market demand,” says David Carroll, president and CEO of GTI. “The outlook for natural gas demand remains robust, thanks to the remarkable expansion of natural gas supplies in recent years and very attractive end user prices. We believe that gas demand will likely reach 24 to 26 trillion cubic feet by 2020, while also helping to reduce US carbon emissions.”
Future growth in demand will be led by the power generation sector, where natural gas is poised to help offset an expected wave of older coal-fired power plant retirements across the country, the group said. Power generation demand in 2010 was at an all-time high, 40% higher than demand in 2000. Industrial demand also bounced back sharply from pre-recession levels.
“New power generation gas demand will be complemented by a continuing industrial rebound,” says William Liss, managing director of GTI’s end-use solutions unit. “Low natural gas prices are helping to expand domestic manufacturing - particularly in the chemical, petrochemical, and food production and processing segments.”
The natural gas industry is also experiencing growth in residential and commercial market sectors. In 2010, residential natural gas demand was the highest since 2003, while commercial customers used more gas than at any time since 1997. While muted by appliance and building energy efficiency improvements, natural gas is well positioned to continue to efficiently meet building energy needs as an environmentally friendly energy source, the group says.
Another area in which GTI anticipates major growth in demand is in the transportation sector, where fleet owners are increasingly turning their attention to natural gas vehicles (NGVs) for their economic benefits. Current prices of compressed natural gas for vehicle use are about $1.95/gal, according to a January survey. In 2010, NGV use was at an all-time high and nearly twice that reported in 2000.
With a large fuel price advantage and an expanding number of vehicle options entering the market, the coming decade should see a strong expansion of NGV use in the US, the group predicts.
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