According to the U.S. Energy Information Administration (EIA), U.S. natural gas production is set to decline in 2024, even as demand reaches a record high. This information comes from the EIA’s Short Term Energy Outlook (STEO) released on Tuesday.
The EIA forecasts that dry gas production will drop from a record 103.8 billion cubic feet per day (bcfd) in 2023 to 103.5 bcfd in 2024. This decrease is attributed to several producers cutting back on drilling activities, following a significant decline in average monthly spot gas prices at the Henry Hub benchmark, which fell to a 32-year low in March.
Looking ahead, the EIA expects production to rebound in 2025, rising to 104.6 bcfd.
On the consumption side, domestic gas use is projected to increase from a record 89.1 bcfd in 2023 to 90.1 bcfd in 2024, before dipping back to 89.1 bcfd in 2025. If these forecasts hold true, 2024 will mark the first year of declining output since 2020, when the COVID-19 pandemic significantly reduced fuel demand. It will also be the first year of consecutive demand increases since 2016.
The latest projections for 2024 indicate a slight increase from the EIA’s earlier September forecasts, which estimated production at 103.4 bcfd and consumption at 89.9 bcfd.
Additionally, the EIA anticipates that average U.S. liquefied natural gas (LNG) exports will rise to 12.1 bcfd in 2024 and 13.8 bcfd in 2025, up from a record 11.9 bcfd in 2023.
In terms of coal production, the agency projects a decline from 577.5 million short tons in 2023 to 510.0 million tons in 2024, marking the lowest output since 1964. The forecast for 2025 is even lower, at 484.6 million tons, the lowest since 1963. This decline is largely due to the shift from coal-fired plants to gas and renewable energy sources.
Furthermore, the EIA estimates that carbon dioxide (CO2) emissions from fossil fuels will decrease from 4.791 billion metric tons in 2023 to 4.777 billion metric tons in 2024, as the use of oil and coal declines. However, emissions are expected to rise slightly to 4.794 billion metric tons in 2025, as petroleum and coal consumption increases again.
For context, CO2 emissions were significantly lower in 2020, totaling 4.584 billion metric tons, the lowest level since 1983, largely due to reduced energy demand during the pandemic.
You Might Be Interested In
- Is Natural Gas the Cleanest Fossil Fuel?
- How Does a Natural Gas Fuel Cell Work?
- Does Ukraine Have Natural Gas Reserves?