Today in Energy

EIA's April Short-Term Energy Outlook (STEO) forecasts decreased total U.S. natural gas consumption in 2021 and 2022 following a decline in 2020. Consumption in 2020 was 1.9 billion cubic feet per day (Bcf/d) lower than the all-time high of 85.1 Bcf/d set in 2019. Total consumption declined as a result of the economic slowdown associated with the COVID-19 pandemic and lower heating demand amid milder temperatures. Although we expect natural gas consumption to continue to fall in 2021 and 2022, changes in sector-level natural gas consumption show different trends than in 2020.

In 2018, the U.S. manufacturing sector consumed 19.4 quadrillion British thermal units (Btu) of energy, according to EIA's latest Manufacturing Energy Consumption Survey (MECS). In 2018, six energy-intensive subsectors—chemicals, petroleum and coal products, paper, primary metals, food, and nonmetallic mineral products—consumed 16.9 quadrillion Btu, or 87% of the total energy consumed in the manufacturing sector.

Significantly colder-than-normal temperatures in the Lower 48 states in late January through mid-February resulted in increased heating demand for natural gas in the United States, despite an otherwise warmer-than-normal winter. As a result, the winter had larger-than-average winter natural gas withdrawals. Before the cold snap, winter temperatures had been relatively mild, but a combination of increased heating demand, record liquefied natural gas (LNG) and pipeline exports, and decreased natural gas production contributed to the withdrawal activity during February.

The rapid development of shale gas resources in Pennsylvania, Ohio, and West Virginia has contributed to sustained low natural gas prices and encouraged the construction of natural gas-fired power plants. About one-third of the new natural gas-fired generating capacity built in the United States since 2010 is located in PJM Interconnection (PJM), the grid operator for all or parts of 13 states in the mid-Atlantic region, including Pennsylvania, Ohio, and West Virginia. In 2020, the utilization rate, called capacity factor, of natural gas-fired combined-cycle (NGCC) units built from 2010 to 2020 in PJM was 71%, which was higher than that of older units in the region.

EIA forecasts U.S. crude oil production in the U.S. Federal Gulf of Mexico (GOM) to increase in the next two years, according to the latest Short-Term Energy Outlook (STEO). By the end of 2022, 13 new projects could account for about 12% of total GOM crude oil production, or about 200,000 barrels per day (b/d).