Energy Investing: Natural Gas Supply and Demand
Energy investors should know that long-term trends in the natural gas industry are primarily dependent on demand projections. Barring the short-term fluctuations, these projections tell you what to expect decades down the road. One of the best places to look for these growth trends are from regular reports of the U.S. Energy Information Administration (EIA) and International Energy Agency (IEA).
The EIA’s Annual Energy Outlook provides long-term supply and demand projections for the United States. According to the early release of its 2013 report, U.S. natural gas consumption is expected to increase 17 percent from current levels to 28.7 Tcf in 2035. The IEA’s World Energy Outlook shows that, globally, natural gas demand will rise even more — some 47 percent, from 120 Tcf to 176 Tcf — in the same time.
Despite projecting long-term supply and demand trends, these organizations don’t always get it right. In 2007, the EIA held an overly bullish outlook for coal consumption. At the time, natural gas prices were rising, averaging $7.51 per Mcf, and the now-famous shale plays hadn’t yet made it into the spotlight.
In that report, imports of U.S. natural gas imports rose significantly to 2030, while coal demand grew steadily. Now it’s six years later, and the EIA has changed its outlook. In fact, the 2013 projections show that natural gas will be the only one of the fossil fuels to increase its share of the overall U.S. energy mix.
The following resources can be quite helpful for finding global growth trends for natural gas. Look for their annual reports:
This table shows the top natural gas–consuming countries, using the most recent data available
|Country||Annual Consumption (Billion Cubic Meters)|
|United States||690.1 Bcm|
|Saudi Arabia||99.2 Bcm|
|United Kingdom||80.2 Bcm|
And this table shows the top-producing natural gas countries.
|Country||Annual Production (Billion Cubic Meters)|
|United States||651 Bcm|
|Saudi Arabia||99 Bcm|