EIA annual report: Natural gas consumption expected to rise through 2040

Published on May 31, 2016 by Jessica Limardo


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According to the U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2016 (AEO2016), natural gas consumption is expected to increase by approximately one percent per year, increasing from current consumption levels of 28 trillion cubic feet (Tcf) in 2015 to 34 Tcf by 2040.

Low natural gas prices in 2015 – the lowest since 1995 – have accelerated this growth, and the EIA anticipates that the trend will continue this year, with gas-fired generation expected to outpace coal-fired generation in 2016.

In the AEO2016 Reference case, the EIA predicts that rising prices through 2021, along with the development of more renewable energy sources due to the extension of tax credits, will contribute to a decline in natural gas-fired generation over the next five years, but that gas-fired generation will increase again during the 2020s and 2030s as coal-fired generation continues to decline in compliance with the Clean Power Plan.

The industrial and electric power sectors’ consumption increases account for 49 percent and 34 percent of total growth, respectively, with exports of liquefied natural gas expected to see a significant increase as well, due to the completion of several facilities that will come online by 2020.

Natural gas use in residential, commercial and transportation sectors will not see significant growth through 2040, due in part to the increased efficiency of domestic gas equipment, such as furnaces and water heaters, according to the report.