U.S. natural gas production will decline in 2024 while demand will rise to a record high, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.
The EIA projected that dry gas production will ease from a record 103.8 billion cubic feet per day in 2023 to 103.2 bcfd in 2024 as several producers reduce drilling activities.
Those producers reduced drilling after average monthly spot gas prices at the Henry Hub benchmark fell to a 32-year low in March, and have remained relatively low since.
In 2025, EIA projected that output would rise to 103.7 bcfd.
The agency also projected that domestic gas consumption would rise from a record 89.1 bcfd in 2023 to 90.5 bcfd in 2024 before easing back to 90.2 bcfd in 2025.
If the projections are correct, 2024 would be the first time that output declines since 2020, when the COVID-19 pandemic cut demand for the fuel. It would also be the first time demand increases for four years in a row since 2016.
The latest projections for 2024 were lower than EIA’s 103.3 bcfd supply forecast in November but higher than the agency’s 90.0 fbcfd demand forecast.
The agency forecast that average U.S. liquefied natural gas (LNG) exports would reach 12.0 bcfd in 2024 and 13.7 bcfd in 2025, up from a record 11.9 bcfd in 2023.
The agency projected that U.S. coal production would fall from 578.0 million short tons in 2023 to 508.8 million tons in 2024, which would be the lowest level since 1964, and 472.3 million tons in 2025, which would be the lowest since 1962, as gas and renewable sources of power displace coal-fired plants.
EIA projected that carbon dioxide (CO2) emissions from fossil fuels would ease from 4.795 billion metric tons in 2023 to 4.772 billion metric tons in 2024 as coal use decreases, before edging up to 4.796 billion metric tons in 2025 as coal and petroleum use increases.
(Reporting by Scott DiSavino; Editing by Richard Chang and Mark Porter)