(Reuters) – U.S. natural gas production will rise to a record high in 2023, while demand will fall, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.
EIA projected dry gas production will rise to 101.09 billion cubic feet per day (bcfd) in 2023 and 101.24 bcfd in 2024 from a record 98.13 bcfd in 2022.
The agency also projected domestic gas consumption would fall to 87.54 bcfd in 2023 and 86.05 bcfd in 2024 from a record 88.53 bcfd in 2022.
If correct, 2024 would be the first time that output rises for four years in a row since 2015. It would also be the first time that demand declines for two years in a row since 2006.
The latest projections for 2023 were higher than the EIA’s April forecast of 100.87 bcfd for supply and 87.37 bcfd for demand.
The agency forecast that average U.S. liquefied natural gas (LNG) exports would reach 12.11 bcfd in 2023 and 12.73 bcfd in 2024, up from a record 10.59 bcfd in 2022.
That 2023 LNG forecast was higher than the 12.08 bcfd EIA forecast in April.
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EIA projected U.S. coal production would fall from 597.2 million short tons in 2022 to 577.1 million short tons in 2023, the lowest since 2020, and 491.2 million short tons in 2024, the lowest since 1963, as natural gas and renewable sources of power displace coal-fired plants.
As gas demand eases and power producers burn less coal, EIA projected carbon dioxide emissions from fossil fuels would fall from 4.964 billion tonnes in 2022 to 4.830 billion tonnes in 2023 and 4.807 billion tonnes in 2024.
That compares with 4.580 billion tonnes in 2020, which was the lowest since 1983 because the coronavirus pandemic depressed demand for energy.
The figure above illustrates the relationship between installed capacity (left panel) and electricity generation (right panel). Because wind, solar, and nuclear have the lowest operating costs, their electricity generation over time mirrors their trend in installed capacity: slightly declining for nuclear, and increasing for wind and solar. By contrast, natural gas and coal have higher operating costs, and so their generation can vary over time depending on demand levels and the relative operating cost of other technologies.
(Reporting by Scott DiSavino Editing by Chris Reese)
