June 9, 2020 / 4:47 PM / 25 days ago

U.S. natgas output, demand to fall in 2020, 2021 due to coronavirus

(Reuters) - U.S. natural gas production and demand will drop in 2020 and 2021 from last year’s record highs as government measures to slow the spread of coronavirus cut economic activity and energy prices, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.

EIA projected dry gas production will drop to 89.65 billion cubic feet per day (bcfd) in 2020 and 85.39 bcfd in 2021 from the all-time high of 92.21 bcfd in 2019.

EIA also projected gas consumption would fall to 81.87 bcfd in 2020 and 78.66 bcfd in 2021, from a record 84.97 bcfd in 2019.

That would be the first annual decline in consumption since 2017 and the first time demand falls for two consecutive years since 2006.

EIA’s gas supply projection for 2020 in June was lower than its May forecast of 89.84 bcfd, while its latest demand outlook for 2020 was higher than its May forecast of 81.69 bcfd.

In June, the agency forecast U.S. liquefied natural gas exports would reach 5.70 bcfd in 2020 and 7.31 bcfd in 2021, up from a record 4.98 bcfd in 2019. That is flat to lower than EIA’s May forecasts of 6.04 bcfd in 2020 and 7.31 bcfd in 2021.

U.S. coal production is expected to fall from 705 million short tons in 2019, the lowest since 1978, to 530 million short tons in 2020, the lowest since 1965, before rising to 549 million short tons in 2021 due to a forecast increase in gas prices, EIA said.

It projected carbon emissions from burning fossil fuels will fall from 5.131 billion tonnes in 2019, the lowest since 1992, to 4.416 billion tonnes in 2020, the lowest since 1983, before rising to 4.650 billion tonnes in 2021 as coal use increases.

Reporting by Scott DiSavino; Editing by Chizu Nomiyama and Richard Chang

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