U.S. natural gas production and demand will drop in 2021 as the economic fallout from coronavirus lockdowns continues, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Jan. 12.
EIA projected dry gas production will drop to 88.17 Bcf/d in 2021 from 90.76 Bcf/d in 2020 before rising to 89.66 Bcf/d in 2022. That compares with an all-time high of 93.06 Bcf/d in 2019.
It also projected gas consumption would fall to 80.73 Bcf/d in 2021 and 79.03 Bcf/d in 2022 from 83.06 Bcf/d in 2020. That compares with a record high of 85.15 Bcf/d in 2019.
If the outlook is correct, 2021 would be the first time output falls for two years in a row since 2005, and 2022 would be the first time consumption falls for three consecutive years since 1983.
EIA's projections for 2021 in January were higher than its December forecasts of 87.91 Bcf/d for supply and 79.37 Bcf/d for demand.
The agency forecast U.S. LNG exports would reach 8.48 Bcf/d in 2021 and 9.22 Bcf/d in 2022, up from a record 6.53 Bcf/d in 2020. That is lower than its December forecast of 8.5 Bcf/d in 2021.
EIA projected U.S. coal production will rise to 603 million short tons in 2021 and 628 million short tons in 2022 from 537 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 4.792 billion tonnes in 2021 and 4.947 billion tonnes in 2022 as power generators burn more coal. That is up from 4.574 billion tonnes in 2020, which was the lowest since 1983.
On its second to last day as the front-month, U.S. natural gas futures for September delivery rose 28.7 cents, or 7.4%, was the front-month’s biggest one-day percentage gain since the February freeze that knocked out power to millions of customers in Texas.
Woodside Petroleum Ltd. said on Dec. 24 it has signed an agreement to supply liquefied natural gas (LNG) to German utility Uniper SE for 13 years starting 2021.
Deal that begins in 2025 covers 1 mtpa and reflects expansion of Pluto LNG facility.