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

FILE PHOTO: The Transcontinental Gas Pipe Line crosses over the Colorado River in this aerial photograph over Wharton, Texas, U.S., April 30, 2020. REUTERS/Adrees Latif/File Photo

(Reuters) - U.S. natural gas production will edge up in 2021, while demand declines for a second year in a row as rising gas prices allow renewables and coal to take some of gas’ market share in the power sector, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.

EIA projected dry gas production will rise to 91.41 billion cubic feet per day (bcfd) in 2021 and 93.29 bcfd in 2022 from 91.36 bcfd in 2020. That compares with an all-time high of 93.06 bcfd in 2019.

It also projected gas consumption would fall to 82.93 bcfd in 2021 and 82.07 bcfd in 2022 from 83.26 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 April were higher than its March forecasts of 91.35 bcfd for supply and 82.52 bcfd for demand.

The agency forecast liquefied natural gas exports would reach 8.46 bcfd in 2021 and 9.22 bcfd in 2022, up from a record 6.53 bcfd in 2020.

EIA projected coal production will rise to 585.3 million short tons in 2021 and 601.7 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.

EIA projected carbon emissions from burning fossil fuels will rise to 4.820 billion tonnes in 2021 and 4.938 billion tonnes in 2022 as power generators burn more coal. That is up from 4.571 billion tonnes in 2020, the lowest since 1983.

Reporting by Scott DiSavino; editing by Jonathan Oatis