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Power Generation Demand For Natural Gas Jumped 9.4% in June, EIA Says

Natural gas deliveries for electric power generation were 976.8 Bcf (32.6 Bcf/d) in June, a 9.4% increase compared with 893.3 Bcf (29.8 Bcf/d) in June 2015, the Energy Information Administration (EIA) said.

It was the highest total delivery for the electric power sector in any June since EIA began tracking them in 2001, according to the agency's latest Natural Gas Monthly report (see Daily GPI, Sept. 1).

Year-over-year total consumption of dry natural gas in June increased in three of the four consuming sectors, EIA said. In addition to the surge in the electric power generation sector, industrial deliveries reached 593 Bcf (19.8 Bcf/d), a 3.9% increase from June 2015 and the highest for the month since EIA began tracking sectoral totals in 2001, and commercial deliveries were 139 Bcf (4.6 Bcf/d), a 3.0% increase from June 2015.

Deliveries to residential consumers, on the other hand, were 123 Bcf (4.1 Bcf/d), a 0.8% decrease from June 2015, "the lowest for the month since EIA began tracking them in 1973, in part because temperatures in the Lower 48 states in June were the warmest on record," EIA said.

The natural gas ascendancy came primarily at the expense of coal. While net generation in the United States increased 1.7% from the previous June, electricity generation from coal decreased in all regions of the country except for Texas and the Northeast, EIA said. At the same time, natural gas generation increased from the previous year in all parts of the country except for the West.

Gas was used to produce 132.4 million MWh of electricity at utility scale facilities in June, an 8.8% increase compared with 121.6 million MWh in June 2015, according to EIA data. Coal was used for 116.4 million MWh in June, down 7.7% from 126.1 million MWh in June 2015.

EIA expects gas-fired power generation to set a record this year, providing an average of 3.8 million MWh/d, a 4% increase from 2015 (see Daily GPI, July 14). Natural gas-fired generation first surpassed coal generation on a monthly basis in April 2015 (see Daily GPI, Oct. 28, 2015). Gas-fired generation has surpassed coal-fired generation in most months since then and is expected to continue to exceed coal generation through the remainder of the year, ultimately providing 34% of the United States' electricity generated this year, EIA said. Coal's share of the 2016 U.S. electricity generating mix is expected to be 30%, with nuclear garnering 19%, and renewables taking 15%.

As natural gas continues to surge in its share of the power stack, the fuel is also expected to generate more carbon dioxide emissions than rival coal for the first time since 1972 (see Daily GPI, Aug. 17). Low gas prices over the next 20 years would accelerate coal retirements and bring emissions in PJM Interconnection territories below targets set by the Environmental Protection Agency's Clean Power Plan, according to a new report from the regional transmission organization (see related story).

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