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EIA: Growing industrial consumption and exports support future US natural gas market growth

Published by , Editorial Assistant
World Pipelines,

The US Energy Information Administration’s (EIA) Annual Energy Outlook 2021 (AEO2021) Reference case projects that growth in natural gas consumption in the United States between 2020 and 2050 will be driven by exports and industrial use; consumption growth from the other sectors will increase slowly or stay flat.

In the Reference case projection, US natural gas production will increase to 43.0 trillion ft3 in 2050 as consumption increases to 35.7 trillion ft3. EIA expects natural gas prices will remain low compared with historical levels, and that low price drives the AEO2021 Reference case’s projection of increased production. EIA expects that exports will rise as production outpaces consumption throughout the projection period.

With economic growth driving US industrial output, natural gas consumption by the industrial sector will increase by 3.6 trillion ft3, or 35%, from 2020 to 2050 and account for more than 75% of the 4.6 trillion ft3 growth in US natural gas consumption from all sectors during that period. Relatively low natural gas prices drive a growing US chemicals industry, the largest domestic natural gas-consuming industry because it uses natural gas as a raw material (feedstock) as well as for heat and power. According to the AEO2021 Reference case, the bulk chemical industry will account for 45% of the industrial sector’s increased natural gas consumption, or 1.6 trillion ft3, through 2050.

Natural gas consumption in the US power sector will reach 12.1 trillion ft3 in 2050, up 0.4 trillion ft3 (4%) from 2020. In 2020, natural gas consumption in the power sector increased by 4% from 2019 to 11.7 trillion ft3 because of relatively low natural gas prices and COVID-19-related disruptions in the power sector’s coal supplies. Amid higher natural gas prices in 2021, EIA projects that consumption of natural gas by the power sector will decrease by 16% to 9.9 trillion ft3. Natural gas consumption will then increase slowly until 2027 because of projected growth in natural gas-fired generation and because of new, more energy-efficient combined-cycle turbine systems. These systems limit growth in power consumption because they use less fuel to produce each kilowatt hour of electricity than older combined-cycle units or other fossil-fueled generators. Beyond 2036, EIA projects that consumption of natural gas in the US power sector will continue to steadily increase.

The AEO2021 projects growth in natural gas consumption by other end-use sectors as well. Beyond 2040, natural gas consumption in the US transportation sector increases as natural gas becomes a more predominant fuel for heavy-duty vehicles and freight rail. The residential sector’s natural gas consumption remains nearly flat, and commercial buildings show low-to-moderate growth because of energy efficiency improvements (particularly commercial energy management controls and sensors) in space heating.


For more news and technical articles from the oil and gas pipeline industry, read the latest issue of World Pipelines magazine.

World Pipelines’ February 2021 issue

The February 2021 issue of World Pipelines includes: a report on Australasian pipelines; an interesting look at the need to protect pipeline information from the Freedom of Information Act (USA); analysis of Ukraine’s place in the global gas sector; and technical articles on subsea repair, coatings, ILI and SCADA systems.

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US pipeline news Natural gas pipeline news