The American Gas Association released a study yesterday thatforecasts gas consumption growth of 40% by 2015, fueled by strongindustrial demand growth, the dominance of gas-fired generation innew power plant construction and the popularity of gas in new homeand commercial construction. AGA projects gas will expand its shareof the U.S. energy market to 28% in 2015. Consumption is expectedto rise to 31.9 quadrillion Btus (roughly 31 Tcf) from about 22.9quads in 1997.

Electric utilities are expected to double their gas consumptionover the period to 6.9 quads, while industrial consumption isprojected to grow 22% to 12.8 quads. Residential consumption isforecast to grow 25% to 6.4 quads, and commercial demand isexpected to jump 27% to 4.1 quads. AGA expects production to climbto 26 Tcf from 19 Tcf over the forecast period, continuing toaccount for about 96% of total supply. Imports from Canada areforecast 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 industryrestructuring putting downward pressure on all energy prices overthe long run,” said AGA Chief Economist David Shin. AGA expects gasprices to be about $2.24/MMBtu (constant value 1997 dollars) in2015 up slightly from $2.17 in 1997, $2.09 in 2000, $2.11 in 2005and $2.15 in 2010. AGA shows utility-delivered residential gasprices falling gradually to $5.75/MMBtu in 2015 from $6.67 in 1997.

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