In updated forecasting stretching to 2023, the Energy Information Administration (EIA) on Tuesday laid out a vision of rising natural gas production and exports alongside moderating U.S. prices.

Natural gas spot prices at Henry Hub averaged $3.91/MMBtu for 2021, the agency said in its latest Short-Term Energy Outlook (STEO). This year and next should bring slightly lower pricing for the national benchmark, with a forecast average price of $3.79 for 2022 and $3.63 for 2023, the agency said.

U.S. liquefied natural gas (LNG) exports rose more than 3 Bcf/d versus 2020 levels to average 9.8 Bcf/d in 2021, and export growth is set to continue in the new year, according to the latest STEO. EIA projected 11.5 Bcf/d of LNG exports on average for 2022, with that figure expected to rise to 12.1 Bcf/d in 2023.

Domestic dry natural gas production is also set to rise this year and next after growing 2.0 Bcf/d year/year to 93.5 Bcf/d on average in 2021. For full-year 2022, EIA forecast 96.0 Bcf/d of production on average; output would then climb to 97.6 Bcf/d next year.

Dampened Demand

U.S. natural gas prices fell sharply in late 2021 as mild weather dampened demand expectations. EIA calculated 612 heating degree days for the December overall, off 122 from the 10-year average.

The milder temperatures resulted in a lighter-than-average draw on U.S. storage inventories in late 2021, allowing stockpiles to eclipse the five-year average. December brought a net 338 Bcf withdrawal, 200 Bcf lighter than the prior five-year average, according to EIA.

In the latest STEO, EIA projected an end-March 2022 storage carryout of 1.8 Tcf, which would come in 8% higher than the 2017-2021 average.

Natural gas saw its share of U.S. electric generation average 37% for 2021, but that figure is expected to decline over the next two years, to 35% in 2022 and 34% in 2023, according to EIA.

Decreasing Natural Gas Generation

“Our forecast for the natural gas share as a generation fuel declines primarily as a result of increased generation from new renewable energy generating capacity,” researchers said. “Coal’s average generation share rose to 23% in 2021 as a result of higher natural gas prices, but we expect it to decline slightly over the next two years, averaging near 22% in 2022 and 2023.”

Energy-related carbon dioxide (CO2) emissions rose 6.2% in 2021 amid economic recovery from the impacts of the Covid-19 pandemic, EIA said. Emissions are expected to grow 1.8% in 2022 and another 0.5% in 2023.

“Even with growth over the next two years, forecast CO2 emissions in 2023 are 3.4% lower than 2019 levels,” researchers said.