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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