Natural gas consumption up 10% year-over-year

By Richard Rostad, analyst, Oil & Gas 360

The U.S.’s demand for natural gas continues to boom, and 2018 marked an all-time high for gas consumption according to the EIA.

Overall natural gas consumption rose by 10% in 2018, averaging 82.1 Bcf/d in the year. This is the first time domestic consumption has exceeded 80 Bcf/d, another major milestone in the rise of natural gas. All sectors grew in the year, but electric power had the largest contribution to overall growth.

Electricity Drove Record U.S. Gas Demand in 2018

Gas continues to displace coal

Natural gas consumption from electric power grew by 3.8 Bcf/d to total 29.1 Bcf/d in the year, and the sector accounts for 35% of national gas demand. Natural gas remains the largest source of electricity in the nation, maintaining the crown it took from coal in 2016. Gas accounts for 35% of electric power generation, compared to coal’s 27%. Natural gas continues to displace coal, as the low prices made possible by U.S. shale makes the fuel ever more attractive. Utilities added about 14.5 gigawatts of natural gas capacity in 2018, while nearly 13 gigawatts of coal shut down.

In addition to the expanded generation capacity, weather was favorable for natural gas demand last year. January was fiercely cold, and included the “polar vortex” that set a new record for single-day gas consumption. A warm summer also helped gas demand, as electric power consumption spiked last summer.

Electricity Drove Record U.S. Gas Demand in 2018

While electric power grew the most in 2018, all sectors saw demand increase in the year.

Residential, commercial and industrial sectors grew by 13%, 10% and 4% respectively. Commercial and industrial demand also hit all-time highs in 2018, while residential consumption was at the highest level in four years.

This expanded demand is easily visible in the storage history for 2018, as inventories stayed below the five-year average throughout the year, and it was below the five-year low for all of the second half of the year. Current natural gas inventories are nearly 22% below the level seen in 2018, suggesting demand has remained robust so far this year. In addition to expanding electric power generation, the rise of LNG exports will bolster U.S. natural gas demand this year, as LNG shipments are expected to reach 5 Bcf/d in 2019.


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