Natural gas supply, demand rises 12%

U.S. natural gas supply and demand rose 12% in the first half of 2018, from the same period in 2017, according to the U.S. Energy Information Administration. In the first half of 2018, natural gas consumption and exports were 93.4 billion cubic feet per day, while total supply of natural gas, including domestic production, imports and storage withdrawals, was 93.3 billion cubic feet per day.

The rise in supply was a result of increased production, especially in the Appalachia region. Total dry natural gas production rose 10%, or by 7.4 billion cubic feet per day, in the first half of 2018, from the same period in 2017. New pipelines that have started to operate since June 2017 have enabled production increases.

In the first half of 2018, domestic natural gas consumption increased in all sectors. The largest growth happened in the residential and commercial sectors, rising 16%, or by 3.8 billion cubic feet per day. Consumption in these sectors relates to heating demand, and in 2018, much of the lower 48 states experienced record and prolonged cold temperatures.

In the U.S. electric power sector, the amount of natural that gas power plants used increased 16%, or by 3.6 billion cubic feet per day, in the first half of 2018, from the same period in 2017. Over the same period, industrial consumption of natural gas rose 6%, or by 1.6 billion cubic feet per day.

Also, natural gas exports have risen over the same period. Liquefied natural gas (LNG) exports, which mostly go to countries in Asia, and pipeline exports, which go to Mexico and Canada, rose 8%, or by 0.7 billion cubic feet per day. LNG exports increased after Train 4 at the Sabine Pass LNG export facility was completed in October 2017 and Cove Point LNG export terminal started operating in March 2018.

Consumption and exports rose 2.7 billion cubic feet per day more than production and imports in the first half of the year, leading to withdrawals of natural gas from storage facilities. So far in 2018, natural gas inventories have fallen 18%, from the previous five-year average, as a result of the high withdrawals and low net injections.