THE SOURCE - Winter 2015 - (Page 16)
Natural Gas Outlook
for Winter 2015-2016
By Daphne Magnuson, Natural Gas Supply Association
atural gas follows the same basic principles of
supply and demand as any other wholesale market.
If demand is greater than supply, pressure on prices
increases until more supply enters the market.
Conversely, if supply is greater than demand, pressure
on prices decreases.
The use of
and the ability
to drill multiple
wells from a single
site have resulted
in declining rig
counts even as
The shale revolution has ushered in a
remarkable era, as evidenced by dramatic
growth in production over the last six
years. Consumers have benefited from the
growth in production and, for four of the
last five winters, factors have combined to
place flat or downward pressure on natural
gas wholesale prices compared to the
previous winter. The one winter of slight
upward pressure occurred in 2013-2014,
which was one of the two coldest winters
in recent recorded history according to the
National Climatic Data Center. Even during
that winter's record cold, natural gas price
increases were short-lived.
Setting aside the positive impacts of the
shale revolution, several key influences on
supply and demand are shaping up for the
winter of 2015-2016.
16 THE SOURCE | THE vOiCE and CHOiCE Of pUbliC gaS
Supply: Production, Storage
The major components of U.S. natural
gas supply are domestic gas production
and storage inventories. Imports from
Canada and liquefied natural gas (LNG)
also play a role in winter supply, however
we will focus now on the most significant
components of supply, and evaluate
winter production and storage based on
the Energy Information Administration's
(EIA) most recent data.
EIA data shows domestic production
exceeding last year's production at this
time, but it also shows that the rate at
which production has been increasing is
slowing after several consecutive years
of tremendous growth. It is notable that,
prior to the shale revolution, one of the
Table of Contents for the Digital Edition of THE SOURCE - Winter 2015
UP-TO-DATE: APGA helps readers keep current on public natural gas industry issues
Where Do APGA’s Furnace Rule Comments Stand Today?
Natural Gas Heat Pumps: Is the Timing Right?
Natural Gas Outlook for Winter 2015-2016
Pipeline to New Markets
Remember to Move Over
The Launch of the APGA Community
Advertisers’ Index/ Advertiser.com
THE SOURCE - Winter 2015