By - Jim Vess

U.S. natural gas consumption set a record in 2018 led by demand from the power sector

Energize Weekly, April 3, 2019

U.S. natural gas consumption—led by demand from the utility sector—rose 10 percent in 2018 to a record 82.1 billion cubic feet per day (Bcf/d), according to data form the federal Energy Information Administration (EIA).

While domestic natural gas use rose across all sectors, the sharpest year-on-year increase, 3.8 Bcf/d, was in electricity generation where the addition of more natural gas-fired capacity and weather-driven demand drove consumption.

The electric power sector used 29.1 Bcf/d, 35 percent of all the natural gas consumed in the country in 2018, as natural gas continued to be the most widely used source of utility-scale electricity generation. Natural gas-fired plants produced 35 percent of the country’s electricity in 2018 followed by coal at 27 percent, nuclear at 19 percent and hydropower at 7 percent. Natural gas surpassed coal as the prime generation source in 2016.

That trend is continuing as nearly 13 gigawatts (GW) of coal-fired generation was retired in 2018 while 14.5 GW of natural gas-fired capacity was added.

In 2018, natural gas consumption in the residential sector grew by 13 percent. The commercial sector saw a 10 percent increase in natural gas use, and the industrial sector’s consumption was up 4 percent.

The commercial and industrial sectors also set consumption records, with commercial using 9.5 Bcf/d and industrial using 2.7 Bcf/d. The residential sector posted its highest consumption since 2014 at 13.4 Bcf/d.

“Natural gas consumption in these sectors was driven by increased demand for space heating during the winter and by industries that require natural gas as feedstock or for process heat,” the EIA said.

Weather plays a big role in the annual variation in natural gas consumption. Natural gas demand levels are highest in the winter since it is used for space heating in the residential and commercial sectors, as well as electricity production.

Natural gas becomes a larger source for electricity generation consumption in summer as demand for air conditioning rises. This summer demand is particularly pronounced in regions such as the Southeast.

“In 2018, the United States experienced several periods of extremely warm and cold weather, contributing to record-high natural gas consumption,” the EIA said.

A large part of the Lower 48 states was hit with prolonged periods of cold in January 2018, and there were record average monthly high temperatures during the summer. In July, utility natural gas consumption hit a record 39.9 Bcf/d, followed by the second highest level, 38.6 Bcf/d, in August.

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