U.S. natgas output to rise, while demand falls for second year in 2021

FILE PHOTO: A natural gas rig is pictured in Springfield Township, Pennsylvania, November 30, 2012. REUTERS/Brett Carlsen/File Photo

(Reuters) - U.S. natural gas production will edge up in 2021, while demand declines for a second year in a row as economic fallout from coronavirus lockdowns continue to plague the market, the U.S. Energy Information Administration (EIA) said in its Short-Term Energy Outlook (STEO) on Tuesday.

The EIA projected dry gas production will rise to 91.35 billion cubic feet per day (bcfd) in 2021 and 92.83 bcfd in 2022 from 91.34 bcfd in 2020. That compares with an all-time high of 93.06 bcfd in 2019.

It also projected gas consumption would fall to 82.52 bcfd in 2021 and 81.60 bcfd in 2022 from 83.25 bcfd in 2020. That compares with a record high of 85.15 bcfd in 2019.

If the outlook is correct, 2021 would mark the first time consumption falls for two consecutive years since 2006, and 2022 would be the first time it falls for three years since 1983.

EIA’s projections for 2021 in March were higher than its February forecasts of 90.50 bcfd for supply and 81.71 bcfd for demand.

The agency forecast U.S. liquefied natural gas exports would reach 8.29 bcfd in 2021 and 9.22 bcfd in 2022, up from a record 6.53 bcfd in 2020. That is lower than its February forecast of 8.46 bcfd in 2021.

The EIA projected U.S. coal production will rise to 581.2 million short tons in 2021 and 610.3 million short tons in 2022 from 539.1 million short tons in 2020, its lowest since 1965, as power plants burn more coal due to a forecast increase in gas prices.

The EIA projected carbon emissions from burning fossil fuels will rise to 4.843 billion tonnes in 2021 and 4.954 billion tonnes in 2022 as power generators burn more coal. That is up from 4.583 billion tonnes in 2020, which was the lowest since 1983.

Reporting by Scott DiSavino; Editing by Chizu Nomiyama and Marguerita Choy