Annual Energy Outlook 2006 with Projections to 2030 - Usinfo.org

Natural Gas DemandIncreases in Natural Gas Use AreModerated by High PricesFigure 71. Natural gas consumption by sector,1990-2030 (trillion cubic feet)12HistoryProjectionsU.S. Natural Gas Consumption Growsthe Most East of the Mississippi RiverFigure 72. Increases in natural gas consumptionby Census division, 2004-2030 (percent per year)New England10864IndustrialElectricitygeneratorsResidentialCommercialMiddle AtlanticSouth AtlanticEast North CentralEast South CentralWest North CentralWest South Central201990 1995 2004 2010 2015 2020 2025 2030TransportationIn the AEO2006 reference case, total natural gas consumptionincreases from 22.4 trillion cubic feet in2004 to 26.9 trillion cubic feet in 2030. Most of theincrease is seen before 2017, when total U.S. naturalgas consumption reaches just under 26.5 trillion cubicfeet. After 2017, high natural gas prices limit consumptionto about 27 trillion cubic feet through 2030.Consequently, the natural gas share of total energyconsumption drops from 23 percent in 2004 to 21 percentin 2030.Currently, high natural gas prices discourage the constructionof new natural-gas-fired electricity generationplants. As a result, only 130 gigawatts of newnatural-gas-fired capacity is added from year-end2004 through 2030, as compared with 154 gigawattsof new coal-fired capacity. Natural gas consumptionin the electric power sector peaks at 7.5 trillion cubicfeet in 2019, then starts falling as new coal-fired electricitygeneration increasingly displaces natural-gasfiredgeneration. Natural gas use for electricity generationdeclines to 6.4 trillion cubic feet in 2030 (Figure71).With natural gas prices remaining relatively highthroughout the projection period, consumption ofnatural gas in the industrial sector gas grows slowly,from 8.5 trillion cubic feet in 2004 to 10.0 trillioncubic feet in 2030. Natural gas consumption increasesin all the major industrial sectors, with the exceptionof the refining industry. High prices also limit consumptionincreases in the buildings sector (residentialand commercial), where natural gas use growsfrom 7.9 trillion cubic feet in 2004 to 9.6 trillion cubicfeet in 2030.MountainPacific0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4From 2004 to 2030, 60 percent of the projectedgrowth in lower 48 end-use consumption of naturalgas occurs east of the Mississippi River (Figure 72).Variation in regional growth rates for natural gasconsumption results from different prospects for populationgrowth, economic activity, and natural-gas-firedelectricity generation. The most rapidincreases in natural gas consumption, averaging 1.3percent per year from 2004 through 2030, are in theSouth Atlantic and East South Central Census divisions.In the West North Central division, consumptiongrows by 1.0 percent per year, and growth ratesin the other Census divisions are less than that,including annual averages of 0.5 percent in New England,0.7 percent in the Middle Atlantic, 0.8 percent inthe East North Central, 0.5 percent in the West SouthCentral, 0.8 percent in the Mountain, and 0.3 percentin the Pacific divisions.The Rocky Mountain and Alaska regions providemost of the increase in domestic natural gas productionfrom 2004 to 2030. Because 60 percent of the projectedgrowth in natural gas consumption occurs eastof the Mississippi River, new natural gas pipelines arebuilt from supply regions in the West to meet naturalgas demand in the East, including a North SlopeAlaska pipeline. An exception is the construction ofnew pipeline capacity originating in the Rocky Mountainsto provide its increasing production to PacificCoast markets. Also, some additional pipeline constructionis expected to provide new LNG terminalsaccess to the major consumption markets and to linkdeepwater natural gas production to major onshoretransmission pipelines.Energy Information Administration / Annual Energy Outlook 2006 85