EIA: Power sector pushed domestic U.S. natural gas consumption to new record in 2018

Source: U.S. EIA.

U.S. natural gas consumption increased by 10% in 2018, reaching a record high of 82.1 Bcfd, according to EIA’s recently released Natural Gas Monthly. Domestic consumption of natural gas increased across all sectors in 2018, led by a 3.8 Bcfd increase in the electric power sector caused by a combination of recent natural gas-fired electric capacity additions and weather-related factors.

The electric power sector consumed 29.1 Bcfd in 2018, or 35% of total domestic U.S. natural gas consumption. Natural gas continued to make up the highest share of utility-scale electricity generation after first surpassing coal-fired generation on an annual basis in 2016. Specifically, natural gas accounted for one-third (35%) of utility-scale electricity generation in 2018, followed by coal (27%), nuclear (19%), and hydropower (7%). New natural gas generator capacity additions continued to displace coal-fired power plants and other less efficient sources of electricity. In 2018, about 14.5 gigawatts (GW) of net natural gas capacity were added, while almost 13 GW of coal-fired capacity were retired.

Annual fluctuations in natural gas consumption are largely driven by weather. During the winter, U.S. natural gas consumption levels are at their highest because natural gas is the predominant source of space heating in the residential and commercial sectors. As natural gas makes up a larger share of electricity generation, natural gas consumption increases both in the summer—when air conditioning demand is high—and in the winter, especially in places such as the South where electric space heating is more common.

Source: U.S. EIA.

In 2018, the U.S. experienced several periods of extremely warm and cold weather, contributing to record-high natural gas consumption. Much of the Lower 48 states experienced prolonged periods of colder-than-normal temperatures in January 2018, and record-high average monthly temperatures during summer 2018 increased natural gas use in the electric power sector. In July 2018, natural gas consumption in the electric power sector set an all-time record of 39.9 Bcfd, followed by the second-highest recorded level in August 2018 of 38.6 Bcfd.
Natural gas consumption also grew in the residential, commercial, and industrial sectors in 2018, increasing 13%, 10%, and 4% compared with 2017 levels, respectively. Both commercial sector (9.5 Bcfd) and industrial sector natural gas use (22.7 Bcfd) reached record highs in 2018, while residential natural gas use (13.6 Bcfd) reached its highest level since 2014. Natural gas consumption in these sectors was driven by increased demand for space heating during the winter and by industries that require natural gas as feedstock or for process heat.

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