Thanks in part to strong production levels and resulting price reductions, US natural gas consumption now is expected to average 67.18 Bcf/d this year, up 100,000 Mcf/d from the Energy Information Administration's month-ago estimate.
In its December Short-Term Energy Outlook, released Tuesday, EIA said that greater use of gas in the industrial and electric power sectors will account for most of the increase in total consumption this year, with projected growth rates of 2.3% and 2.2%, respectively.
The agency also hiked its earlier estimate for 2012 consumption to 68.4 Bcf/d, up 1.7%.
US marketed natural gas production should average 65.9 Bcf/d in 2011, a 6.6% increase over 2010, the report added. For 2012, marketed production will continue to grow, but at a slower pace, increasing by 2.8%.
"All of this growth comes from higher onshore production in the Lower-48 States, which more than offsets a year-over-year decline of 1.2 Bcf/d (20%) in the Federal Gulf of Mexico," it said.
Growing domestic gas production "has reduced reliance on natural gas imports and contributed to increased exports," EIA observed. It expects pipeline gross imports will fall by 6.5% to 8.5 Bcf/d this year and by another 3.6% to 8.2 Bcf/d in 2012. Projected US imports of liquefied natural gas will fall from 1.2 Bcf/d in 2010 to 0.9 Bcf/d in 2011 and to 0.7 Bcf/d in 2012, according to the report.
Meanwhile, pipeline gross exports to Mexico and Canada are expected to average 4.3 Bcf/d this year and 4.4 Bcf/d in 2012, compared with 3.1 Bcf/d in 2010. Gas storage levels also have been strong, the agency said, noting that at the end of November gas stocks were at a record high, about 1% above the same time last year.
"This winter began with fairly mild weather," said the report, noting that heating degree-days were estimated to be down by 8% in October and 12% in November from the 30-year (1970-2000) normal levels.
"The warm weather combined with the strong production growth this year has enabled stocks to reach such high levels," said EIA. It now expects working natural gas inventories will total about 1.8 Tcf at the end of March 2012.
