American Oil and Gas Reporter - December 2021 - 42

SpecialReport: Natural Gas White Papers
forecasts production to provide a steady
response to increased demand for domestic
natural gas and LNG/pipeline exports
this winter. Natural gas offers the opportunity
to secure a cleaner energy future
that is affordable, accessible and can help
grow local economies, all while helping
to reduce global emissions.
Demand Drivers
The analysis projects that total demand
will reach 111.9 billion cubic feet a day
this winter, slightly higher than last
winter's 110.9 Bcf/d. Domestic demand
is forecasted to average 86.5 Bcf/d from
the electric, industrial and residential/commercial
sectors combined this winter.
This represents a net decrease of 1.4
Bcf/d compared with last winter, with
electric generation accounting for the reduced
consumption, offset partially by
the ongoing recovery in industrial demand.
Natural
gas power burn is projected
to decrease by 2 Bcf/d during the upcoming
winter because of less temporary
FIGURE 2
Non-associated
BCFD
1.50
Production Growth by Basin (Jan-Aug 2021 versus 2020)
Associated
Gas Production Change
1.4 BCFD
Gas Production Change
-2.1 BCFD
" economic " fuel switching to gas-fired
electricity given higher anticipated natural
gas prices. However, continued growth
in new " structural " natural gas-fired electricity
is expected with the addition of 10
gigawatts of new gas-fired capacity in
2021-2022 due to lower-emissions goals.
In contrast, the NGSA Winter Outlook
projects that gas demand in the industrial
market will grow 1 Bcf/d primarily because
of strengthening industrial activity and
improved utilization rates of facilities
this winter. New-builds and capacity expansions
in the gas-intensive petrochemical
and fertilizer industries continue to contribute
to industrial demand. Twenty-two
major gas-intensive projects are planned
from 2021 to 2024, collectively consuming
an estimated average 1 Bcf/d of natural
gas by 2024.
Demand in the residential/commercial
sector is forecasted by NGSA to remain
the same as last winter based on the National
Oceanic & Atmospheric Administration's
forecast for a weather pattern
that is quite similar (1% colder) to last
winter. Using NOAA's winter weather
forecast as the base case, the end-ofMarch
2022 storage level is forecast at
1.69 trillion cubic feet, approaching the
average of the three-year range. Projected
winter 2021-22 withdrawal averages 12.9
Bcf/d, which is 2.5 Bcf/d lower than
last year.
However, as was dramatically demonstrated
by the massive and lingering
Arctic weather event last February, weather
remains the single biggest wildcard
in predicting future demand among residential/commercial
users. Consequently,
in addition to the base case, the NGSA
analyses also includes a cold-winter scenario
modeled after winter 2013-14 and
a warm winter scenario similar to 201516.
According to the modeled results,
residential and commercial gas demand
could swing 6 Bcf/d in either direction
depending on the weather. The weather
sensitivity analysis shows that the endof-March
storage levels can drop well
below the three-year average under a
cold-winter scenario.
1.00
0.50
0.00
(0.50)
(1.00)
(1.50)
42 THE AMERICAN OIL & GAS REPORTER
Haynesville
Marcellus
Utica
Permian
Bakken
Niobrara
Eagle Ford
Anadarko
Other Basins
Lower 48
American Oil and Gas Reporter - December 2021

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