U.S. natgas output, demand to fall in 2020, 2021 due to coronavirus

U.S. natural gas production and demand will drop in 2020 and 2021 from record highs last year as government steps to slow the spread of coronavirus cut economic activity and energy prices, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO) on Tuesday.

The statistical arm of the U.S. Department of Energy projected dry gas production will drop to 89.84 billion cubic feet per day (bcfd) in 2020 and 84.89 bcfd in 2021 from the all-time high of 92.21 bcfd in 2019.

That would be the first annual decline in production since 2016 and the first time output falls for two years in a row since 2005.

The EIA also projected gas consumption would fall to 81.69 bcfd in 2020 and 79.17 bcfd in 2021 from a record 84.97 bcfd in 2019.

That would be the first annual decline in consumption since 2017 and the first time demand falls for two consecutive years since 2006.

The EIA’s gas supply and demand projections for 2020 in May were lower than its April forecasts of 91.70 bcfd for output and 83.79 bcfd for consumption.

In May, the agency forecast U.S. liquefied natural gas exports would reach 6.04 bcfd in 2020 and 7.31 bcfd in 2021, up from a record 4.98 bcfd in 2019. That is lower than EIA’s April forecasts of 6.96 bcfd in 2020 and 7.72 bcfd in 2021.

EIA said gas’ share of power generation will rise from 37% in 2019 to 39% in 2020 before easing to 36% in 2021 as gas prices increase, while coal’s share will slide from 24% in 2019 to 19% in 2020 before rising to 21% in 2021.

U.S. coal production is expected to fall from 690 million short tons in 2019, the lowest since 1978, to 523 million short tons in 2020, the lowest since 1964, before rising to 550 million short tons in 2021, the EIA said.

It projected carbon emissions from burning fossil fuels will fall from 5.130 billion tonnes in 2019, the lowest since 1992, to 4.559 billion tonnes in 2020, the lowest since 1983, before rising to 4.771 billion tonnes in 2021. (Reporting by Scott DiSavino Editing by Marguerita Choy)