EIA: US sets natural gas records in 2018

Dec 05, 2019

Oil & Gas Journal | November 19th, 2019

The US set new records in natural gas production, consumption, and exports in 2018, according to the US Energy Information Administration (EIA). Its Natural Gas Annual 2018 shows that dry natural gas production increased by 12% during 2018, reaching a record-high average of 83.8 bcfd.

This increase was the largest percentage increase since 1951 and the largest volumetric increase in the history of the series, which dates back to 1930. US natural gas consumption increased by 11% in 2018, driven by the electric power sector. Natural gas gross exports totaled 10 bcfd in 2018, 14% more than the 2017 total of 8.6 bcfd. Several new LNG export plants came online in 2018, allowing for more exports.

US natural gas consumption grew in each end-use sector. Demand for natural gas as a home heating fuel was greater in 2018 than in 2017 because of slightly colder weather during most of the winter. Similarly, the summer of 2018 saw record-high temperatures, increasing demand for air conditioning and, therefore, electricity, much of which was generated by natural gas-fueled power plants. The electric power sector has been shifting toward natural gas in the past decade because of favorable prices and efficiency gains.

US natural gas production growth was concentrated in the Appalachian, Permian, and Haynesville regions. Pennsylvania and Ohio, states that overlay Appalachian basin, had the first- and third-largest year-over-year increases for 2018, increasing by 2 bcfd and 1.7 bcfd, respectively. Louisiana had the second-largest volumetric increase in dry production, up 1.8 bcfd as a result of more production from Haynesville shale. Texas remained the top natural gas-producing state (18.7 bcfd), as a result of continued drilling activity in the Permian basin in western Texas and eastern New Mexico.

US exports have risen steadily since 2014, when they totaled 4.1 bcfd. This has been the case despite fluctuating export prices. The average US export price in 2014 was $5.51/Mcf, dropping to $2.79/Mcf in 2016 before rebounding to $3.89/Mcf in 2018. Exports from Texas in 2018 averaged 3.9 bcfd, up from 1.4 bcfd in 2013.