AGA Sees Demand Growing 40% by 2015
The American Gas Association released a study last week that
forecasts gas consumption growth of 40% by 2015, fueled by strong
industrial demand growth, the dominance of gas-fired generation in
new power plant construction and the popularity of gas in new home
and commercial construction.
AGA projects gas will expand its share of the U.S. energy market
to 28% in 2015. Consumption is expected to rise to 31.9 quadrillion
Btus (roughly 31 Tcf) from about 22.9 quads in 1997.
According to The 1998 AGA-TERA (Total Resources Analysis) Base
Case, electric utilities are expected to double their gas
consumption over the period to 6.9 quads, while industrial
consumption is projected to grow 22% to 12.8 quads. Residential
consumption is forecast to grow 25% to 6.4 quads, and commercial
demand is expected to jump 27% to 4.1 quads.
AGA expects production to climb to 26 Tcf from 19 Tcf over the
forecast period, continuing to account for about 96% of total
supply. Imports from Canada are forecast to grow to only 4 Tcf by
2015 from 2.96 Tcf in 1997.
"Prices will increase very modestly in real dollars by 2015,
with increased inter-fuel competition and energy industry
restructuring putting downward pressure on all energy prices over
the long run," said AGA Chief Economist David Shin. AGA expects gas
prices to be about $2.24/MMBtu (constant value 1997 dollars) in
2015 up slightly from $2.17 in 1997, $2.09 in 2000, $2.11 in 2005
and $2.15 in 2010. In nominal dollars, i.e., including inflation,
wellhead prices are projected to reach $3.86/MMBtu by 2015.
AGA shows utility-delivered residential gas prices falling
gradually to $5.75/MMBtu in 2015 from $6.67 in 1997.
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