U.S. natgas output, demand expected to fall for second year in 2021

U.S. natural gas production and demand will drop for a second year in a row in 2021, the U.S. Energy Information Administration (EIA) said in its Short Term Energy Outlook (STEO).

The EIA projected dry gas production will drop to 91.06 billion cubic feet per day (bcfd) in 2021 from 91.35 bcfd in 2020 before rising to 93.12 bcfd in 2022. That compares with an all-time high of 93.06 bcfd in 2019.

The agency also projected gas consumption would fall to 82.64 bcfd in 2021 and 82.53 bcfd in 2022 from 83.25 bcfd in 2020. That compares with a record high of 85.15 bcfd in 2019.

If the outlook is correct, 2021 would mark the first time production falls for two consecutive years since 2005, and 2022 would be the first time consumption falls for three years since 1983.

The EIA's projections for 2021 in May were lower than its April forecasts of 91.41 bcfd for supply and 82.93 bcfd for demand.

The agency forecast U.S. liquefied natural gas exports would reach 9.20 bcfd in 2021 and 9.22 bcfd in 2022, up from a record 6.53 bcfd in 2020. That is higher than its April forecast of 8.46 bcfd in 2021.

The EIA projected U.S. coal production will rise to 582 million short tons in 2021 and 605 million short tons in 2022 from 539 million short tons in 2020, its lowest since 1965, as power plants burn more coal due to a forecast increase in gas prices.

The EIA projected carbon emissions from burning fossil fuels will rise to 4.863 billion tonnes in 2021 and 4.955 billion tonnes in 2022 as power generators burn more coal. That is up from 4.571 billion tonnes in 2020, which was the lowest since 1983. (Reporting by Scott DiSavino Editing by Marguerita Choy)

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