Print this pageAAPG ANNUAL CONFERENCE AND EXHIBITION
Making the Next Giant Leap in Geosciences
April 10-13, 2011, Houston, Texas, USA
The Outlook for U.S. Natural Gas Demand
(1) Bureau of Economic Geology, University of Texas, Kingwood, TX.
North America has dramatically expanded its natural gas resource base with the discovery and development of multiple emerging shale gas plays. The U.S. demonstrated in 2008 that the U.S. producers have the ability to grow natural gas production driven primarily by these emerging gas plays. However, the rapid price decline beginning in late 2008 also demonstrated what the pricing effects could be if inadequate gas demand is available to match the rising natural gas production. Then beginning in September 2008 the lower gas demand and lower natural gas pricing led to a decline in active gas drilling rigs which are now constraining development of both conventional and unconventional natural gas plays. The availability of growing natural gas demand will continue to be a significant limiting factor on development pace of the emerging shale gas plays.
This paper will look at the outlook for U.S. natural gas demand growth and identify which sectors have the potential for material demand growth. The paper will attempt to quantify growth in natural gas demand by sector and also to quantify demand growth in total through 2030. This ultimate demand growth willl likely set the ceiling for U.S. natural gas production and as a consequence will likely strongly influence the pace of shale gas development in the U.S. and Canada. The paper will identify the few key sectors with growth potential and will demonstrate the degree to which efficiency improvements should be expected to offset growth in each sector.
The conclusion of the paper is that demand growth sufficient to allow substantial growth in U.S. natural gas production will heavily rely on further gas penetration in the power generation sector or growth which could be very challenging to achieve in the transportation sector.