EIA: US natgas production will decline in 2024 as demand reaches record levels, EIA reports

The U.S. Energy Information Administration's (EIA's) Short Term Energy Outlook, released on Tuesday, predicted that U.S. Natural Gas production would decline by 2024 and demand would rise to a new record.

EIA projects that dry gas production in the US will fall from a record high of 103.8 billion cubic foot per day (bcfd), in 2023, to 103.5 bcfd by 2024. This is because several producers have reduced drilling activities following average monthly spot prices at Henry Hub benchmark In March, the number of people who were unemployed fell to its lowest level in 32 years.

EIA's projected production for 2025 is 104.6 bcfd.

The agency also predicted that domestic gas consumption will rise from a new record of 89.1 Bcfd by 2023, to 90.1 Bcfd by 2024, before falling back to 89.1 Bcfd by 2025.

If the projections prove correct, the COVID-19 epidemic in 2020 reduced demand for fuel, resulting in a decline of output. This would be the first four-year demand increase since 2016.

The EIA forecasts of September were 103.4 bcfd in supply and 89.9 for consumption.

The agency predicted that average U.S. LNG exports will reach 12.1 billion cubic feet per day (bcfd) in 2024, and 13.8 billion cubic feet per day in 2025. This is up from 11.9 million cubic feet per day in 2023.

As gas and renewable energy sources replace coal-fired power plants, the agency predicted that U.S. coal output would drop from 577.5 millions short tons in 2013 to 510.0 in 2024. This would be at its lowest level since 1964. By 2025, it would have fallen to 484.6 million tonnes, the lowest amount since 1963.

EIA predicted that carbon dioxide (CO2) emission from fossil fuels will decrease from 4.791 million metric tonnes in 2023 to 4,777 million metric tonnes in 2024, as oil and coal consumption decreases. Then the emissions are projected to increase to 4.794 millions metric ton in 2025 when petroleum and coal usage increases.

This compares to carbon emissions of only 4.584 billion tons in 2020. The lowest level since 1983 when the pandemic drained demand for energy. Reporting by Scott DiSavino, Editing by Richard Chang and David Gregorio

(source: Reuters)