Natural gas spot prices at the national benchmark Henry Hub in Louisiana rose 50 cents per million British thermal units to an average of $3.01 per million British thermal units in 2017, from 2016, according to the U.S. Energy Information Administration. The higher prices led to a 6% decline in natural gas consumption for power generation. And while domestic natural gas production rose 1%, it was offset by increased exports of natural gas by pipeline and liquefied natural gas shipments.
“Overall, natural gas prices at key regional trading hubs were less volatile in 2017 than in previous years, as pipelines that came online throughout the year eased some infrastructure constraints that affect regional prices,” according to the EIA. In the Northeast, the price tends to spike during cold weather, but warmer winter weather and new pipeline capacity helped to keep the prices stable. “However, record cold temperatures at the end of December in the eastern United States led to record high demand for natural gas and significant price spikes at many trading locations.”
Until late 2017, the warm weather limited consumption growth in the residential and commercial sectors, according to the EIA. In early 2017, the mild winter weather also limited natural gas storage withdrawals, and the first net injection of natural gas was recorded in February 2017.
Price differences narrowed between the Henry Hub and hubs in the Northeast as natural gas production in the Appalachian region increased at a higher rate than in any other region.
In 2017, the United States is expected to become a net exporter of natural gas for the first time since 1957, and is projected to export 0.4 billion cubic feet per day more than it imported in 2017, according to the EIA. The United States is exporting more natural gas to Mexico and more LNG to at least 20 countries while importing less natural gas by pipeline from Canada. In 2017, LNG exports increased 1.4 billion cubic feet per day to an average of 1.9 billion cubic feet per day in 2016. By the end of 2019, U.S. liquefaction capacity is expected to increase to 9.6 billion cubic feet per day.