EIA Gas Forecast | Russell T. Rudy Energy LLC
A recent article in “Rigzone” summarized the latest natural gas forecast by the U. S. Energy Information Administration (EIA). While the 2015 forecast was revised slightly downward to 79.58 billion cubic feet a day (bcfd), it still surpasses the 2014 level of 47.89.
However, with the current year all but over, I found the 2016 forecast much more interesting. The EIA sees gas production reaching a new record high of 81.05 bcfd next year. Unfortunately, it projects consumption at 76.66 bcfd, a new record as well, but short of production. In my opinion, this will not help address the current surplus and depressed prices.
The EIA sees gas demand for power generation in 2016 falling 2.3% but remaining relatively strong due to low prices, compared to coal. Industrial demand, while flat in 2015 is expected to increase 3.9% next year as new fertilizer and chemical facilities start up.
Gas production is expected to increase in spite of low prices and declining drilling activity, due to increased efficiency. Most of the increase is expected in the Marcellus shale of Pennsylvania and West Virginia where operators are expected to reduce the inventory of drilled but uncompleted wells. New pipelines are projected to come on stream in 2016 as well, and move more gas to markets in the Northeast.
Increased domestic production should result in reduced imports of Canadian gas and increased exports to Mexico. The Eagle Ford shale of South Texas is finding a growing market in Mexico for gas for power generation.
Liquefied natural gas exports are expected to increase by .7 bcfd with the startup of Cheniere Energy’s Sabine Pass facility in early 2016.
To read the article in its entirety, please go to http://www.rigzone.com/news/article.asp?hpf=1&a_id=142017&utm .
