EIA sees US gas production, consumption at record highs in 2016

2/12/2016

(Reuters) -- The US Energy Information Administration (EIA) said this week that domestic natural gas production in 2016 was expected to reach 79.69 billion cubic feet/day, up a shade from the 79.68 bcfd it forecast last month.

That forecast production would top 2015's record high of 79.13 bcfd and would be the sixth consecutive annual record high for US gas production, according to the EIA's Short-Term Energy Outlook (STEO) in February.

The EIA forecast US gas consumption meanwhile will ease to 76.44 bcfd in 2016, down a bit from the 76.57 bcfd it forecast in January.

That would top the 2015 record high for gas demand of 75.38 bcfd and would be the seventh annual record high in a row.

For 2017, the agency forecast more record highs with production expected to rise to 81.26 bcfd and consumption up to 77.29 bcfd.

Consumption will rise in 2016 and 2017 primarily as industrial demand increases as new fertilizer and chemical plants enter service.

Growth in production will slow in 2016 as low gas prices and declining rig activity begin to affect output. In 2017, the EIA forecast production growth will increase as prices rise, industrial demand grows and liquefied natural gas (LNG) exports increase.

The EIA projects LNG gross exports will increase to an average of 0.5 bcfd in 2016, with the start-up of Cheniere Energy Inc's Sabine Pass LNG liquefaction plant in Louisiana planned for late February or early March.

Gross LNG exports will average 1.3 bcfd in 2017, as Sabine Pass ramps up its capacity.

US coal production for January 2016 was 59 million short tons (MMst), a 7% (4 MMst) decrease from December 2015 and the lowest monthly production since July 1983, according to the EIA.

Forecast coal production declines continue in 2016, with coal production expected to average 834 MMst, a 6% decline from 2015, EIA said.

(Reporting by Scott DiSavino; Editing by Marguerita Choy)