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.
EIA projected dry gas production will ease from a record 103.8 billion cubic feet per day (bcfd) in 2023 to 103.4 bcfd in 2024 as several producers reduce drilling activities after spot gas prices at the Henry Hub benchmark fell to 25-year lows in March.
In 2025, EIA projected output would rise to 104.8 bcfd.
The agency also projected domestic gas consumption would rise from a record 89.1 bcfd in 2023 to 89.9 bcfd in 2024 before easing to 89.5 bcfd in 2025.
If the projections are correct, 2024 would be the first time output will have declined since 2020, when the COVID-19 pandemic cut demand for the fuel. It would also be the first time demand has increased for four years in a row since 2016.
The latest projections for 2024 were higher than EIA’s forecasts in August of 103.3 bcfd for supply and 89.8 bcfd for consumption.
In Appalachia, the biggest U.S. shale gas basin spanning Pennsylvania, Ohio and West Virginia, marketed (wet) gas production is set to decline from 35.4 bcfd in August to 35.3 bcfd in September. Appalachia output hit monthly records of 37.1 bcfd in November and December 2023.
The agency forecast average U.S. liquefied natural gas (LNG) exports would reach 12.1 bcfd in 2024 and 14.1 bcfd in 2025, up from a record 11.9 bcfd in 2023.
That was lower than EIA’s LNG export forecast in August of 12.2 bcfd.
The agency projected U.S. coal production would fall from 577.5 million short tons in 2023 to 501.0 million tons in 2024, which would be the lowest level since 1963, and 475.1 million tons in 2025, which would be the lowest since 1962, as gas and renewable sources of power displace coal-fired plants.
EIA projected carbon dioxide (CO2) emissions from fossil fuels would rise from 4.793 billion metric tons in 2023 to 4.809 billion metric tons in 2024 as gas use increases, and 4.821 billion metric tons in 2025 as petroleum use increases.
That means carbon emissions are on track to rise in four out of five years through 2025 since dropping to 4.584 billion metric tons in 2020, the lowest level since 1983, when the pandemic sapped demand for energy.
Carbon emissions also declined in 2023 as power companies burned less coal.
(Reporting by Scott DiSavino; Editing by Paul Simao)