Natural gas usage expected to rise 50 % in next 20 years

Mar 08, 2002 01:00 AM

Use of natural gas will grow by 50 % during the next 20 years, making the fuel one of the fastest growing forms of energy in the United States, according to a preliminary forecast published by the US energy Information Administration.
Demand for natural gas is expected to show an average annual growth rate of 2 % between now and 2021 -- a higher rate of growth than other conventional fossil fuels (coal +1.2 %, and petroleum +1.5 %). Annual natural gas consumption will increase from the current 22.8 tcf to 33.8 tcf, primarily due to rapid growth in demand for power generation.

The American Gas Association is urging Congress to make significant changes to energy policy, including allowing the tax system to promote rather than impede expansion of local natural gas utility pipelines, such as by allowing utilities to depreciate costs over 10 years. The AGA said it will cost local natural gas utilities approximately $ 100 bn during the next 20 years to expand and upgrade their facilities to meet increased demand.
As demand for natural gas increases, EIA projects that production will rise from the current 19.1 tcf to 28.5 tcf in the next 20 years, an average rate of 2 %. The EIA projected that the average wellhead price of natural gas would rise from 53.60 per mm cf in 2000 to nearly $ 4 in 2001, then decline sharply in 2002.

The price is expected to reach $ 3.26 per mm cf (in current dollars ) in 20 years, slightly higher than the $ 3.20 that the EIA projected last December.
"As the expected demand for natural gas increases over time, price increases are slowed by technological improvements in natural gas exploration and production," the EIA stated.

Source: Pipeline & Gas Journal
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