(Reuters) - U.S. natural gas production and demand will decline in 2021 after hitting record highs this year, the Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Wednesday.
EIA delayed the release of the March STEO update by one day to incorporate the recent drop in global oil prices. [O/R]
EIA projected dry gas production will fall to 92.61 billion cubic feet per day (bcfd) in 2021 from a forecast record 95.28 bcfd in 2020. The current all-time high is 92.24 bcfd in 2019.
That would be the first annual decline in production since 2016.
EIA also projected U.S. gas consumption would fall to 85.61 bcfd in 2021 from a forecast record 87.27 bcfd in 2020 due mostly to reduced power demand as renewables produce more electricity. The current all-time high is 84.97 bcfd in 2019.
That would be the first annual decline in consumption since 2017.
In March, the agency forecast U.S. net gas exports would reach 7.2 bcfd in 2020 and 8.9 bcfd in 2021, up from 5.3 bcfd in 2019. The United States became a net gas exporter in 2017 for the first time in 60 years. The 2020 net export forecast is lower than EIA’s 7.6-bcfd outlook in February.
EIA projected gas would remain the primary U.S. power plant fuel in 2020 and 2021 after supplanting coal in 2016.
It projected the share of gas generation would rise to 39% in 2020 before easing to 37% in 2021, the same as in 2019.
Coal’s share of generation was forecast to slide to 21% in 2020 and 2021 from 24% in 2019.
Nuclear’s share of generation was expected to hold around 20% in 2020 and 2021, while renewables would rise from 19% in 2020 to 21% in 2021.
EIA projected the power sector would burn 453.1 million short tons of coal in 2020, the lowest since 1976 before rising to 466.1 million tons in 2021 due to an expected rise in gas prices. That would be the first annual increase since 2013 and compares with 539.4 million tons in 2019, the lowest since 1979.
U.S. carbon emissions have mostly declined since peaking at 6.003 billion tonnes in 2007 as the power sector burns less coal.
EIA projected carbon emissions would slip from 5.135 billion tonnes in 2019 to 5.024 billion tonnes in 2020 and 5.003 billion tonnes in 2021, both the lowest since 1991.
Reporting by Scott DiSavino; Editing by Chizu Nomiyama and David Gregorio