Natural gas consumption expected to be down this year

Overall natural gas consumption in the U.S. electric power sector is expected to be down this year, according to the U.S. Energy Information Administration.

EIA expects domestic consumption of natural gas to fall by 3.4 billion cubic feet per day (Bcf/d) compared with 2019. In the first half of 2020, EIA expects natural gas used for electric power to grow 1.6 Bcf/d compared with the first half of 2019, but consumption in the second half of 2020 to decline 2.2 Bcf/d compared to the same period last year. Rising natural gas prices in the second half of 2020 will drive down consumption.

The most dramatic drop reflected in industrial natural gas consumption, which will fall by 1.6 Bcf/d. The decline is due to overall reduced economic activity related to the impact of the 2019 novel coronavirus disease (COVID-19) and milder-than-normal temperatures in the first quarter of 2020.

In the residential and commercial sectors, consumption is expected to decrease by 3.7 percent and 6.9 percent, respectively. Warmer weather in the first quarter of 2020 was the largest contributor to falling residential and commercial demand, which was down a combined 5.6 Bcf/d in the first quarter of 2020 compared with the first quarter of 2019. January 2020 was the fifth warmest January on record. EIA expects weaker economic conditions in the coming months to further reduce average 2020 natural gas consumption in the commercial sector.

Weak economic conditions will also contribute to lower industrial natural gas demand this year. EIA expects demand to decline from an average of 21.4 Bcf/d in 2019 to an average of 19.9 Bcf/d in 2020. It is the first time it has dipped lower than 20.0 Bcf/d since the summer of 2016.