US Natural Gas Production 4-9-25

While U.S. natural gas production is currently outpacing demand, the U.S. Energy Information Administration (EIA) projects that demand will continue to rise, potentially exceeding supply in the coming years, especially with the increased demand for liquefied natural gas (LNG) exports.  

Here's a more detailed breakdown:

Current Situation: U.S. natural gas production is currently high, with the EIA projecting that demand will exceed supply in 2025 and 2026. 

Factors Affecting Demand: Increased LNG Exports: Rising demand for LNG exports from the U.S. is a significant factor driving increased demand. 

Domestic Consumption: Data centers and other industrial sectors are also increasing their natural gas consumption. 

Weather: Weather patterns, especially during winter and summer, significantly impact natural gas consumption. 

Factors Affecting Supply: Production Cuts: Some producers have curtailed output, leading to a temporary decrease in production. 

Drilling Rig Activity: The number of natural gas-directed drilling rigs has decreased, which can contribute to a decline in production. 

Future Projections: Higher Prices: The EIA expects the Henry Hub natural gas spot price to increase in 2025 and 2026, reflecting the tighter supply-demand balance. 

Storage Inventories: Because of more demand relative to supply, storage inventories are expected to be below the five-year average in the third quarter of 2025 and remain below the average for the rest of the forecast period. 

Renewables: Renewables, new energy-storage solutions, and energy carriers such as hydrogen are expected to become more prominent in the energy mix, potentially leading to a decline in the use of natural gas for power generation in the long term. 

Specific Figures: In 2024, U.S. natural gas consumption averaged a record 90.3 billion cubic feet per day (Bcf/d). 

The EIA forecasts that domestic gas consumption will reach 92.0 bcf/d in 2025, before slightly declining to 91.1 bcf/d in 2026. 

The EIA projects that U.S. LNG exports will reach 13.8 bcfd in 2025, up from a record 11.9 bcfd in 2023. 

Source: Google Search

Comments

Increasing Natural Gas Production in the US is needed to produce reliable electricity in the US. Our electric grid is not robust enough to supply electricity reliably. The planned AI Data Centers will have their own Nuclear Powered Energy Sources, but the US grid will need 100 more Natural Gas powered Electricity Generating Power Plants to go on-line to bring the Grid up to speed.

EIA is forecasting a decline in demand in 2026. Production is projected to increase. This should lower the cost in 2026. The increase in the supply of natural gas lowers the price.

Norb Leahy, Dunwoody GA Tea Party Leader