Key facts and trends in the natural gas industry during 2003 are highlighted in “The Natural Gas Industry and Markets in 2003,” a special report from the Energy Information Administration (EIA) based on EIA’s Natural Gas Annual 2003.
Both prices and storage withdrawals set record highs.
The national average natural gas wellhead price in 2003 was $4.88 per thousand cubic feet (Mcf), about 65 percent more than in 2002. Measured in constant 2003 dollars, this price was the highest ever recorded, exceeding the previous record level of $4.21 in 1983 by nearly 16 percent.
Total natural gas production and net imports decreased by 86 billion cubic feet (Bcf) in 2003 even with the strong economic incentive for increased supplies.
U.S. natural gas production rose 108 Bcf in 2003, less than 1 percent above 2002 and well below the 2001 level even though an increased number of drilling rigs was employed in the commercial development of gas deposits.
Higher domestic production in 2003 was more than offset by a 5.6-percent decline in the volume of net imports, the second consecutive year of decline after 15 years of increases.
Total net imports including liquefied natural gas (LNG) were 195 Bcf below the previous year even though LNG imports more than doubled to a record high of 507 Bcf as all four LNG import terminals in the 48 States were operational for the first time in two decades.
Natural Gas Consumption By Sector, 1999-2003
(Trillion Cubic Feet)
Source: Energy Information Administration.Net imports from Canada (the source of roughly 87 percent of imports during the year) were more than 11 percent below the previous year as Canadian production declined and Canadian consumption increased.
At the same time, U.S. exports--mostly to Mexico and Canada--expanded by more than 175 Bcf.
The highest net withdrawals from storage in EIA’s 30-year database were recorded in January and February of 2003, and natural gas inventories were drawn down to the lowest levels on record by the end of March 2003.
The large stock draws were at least in part due to colder temperatures in the first two months of the year compared with a year earlier, as measured by gas-customer weighted heating degree-days.
Inventories then registered a record-matching net increase by the start of the 2003-2004 heating season.
Total deliveries to consumers shrank 3 percent under the dual constraints of tighter supply and higher prices. Weather-related increases in residential and commercial consumption were not enough to offset lower consumption in the more price-sensitive industrial and electric power sectors.
Demand from industry--the largest natural gas consumer--fell almost 5 percent.
Consumption of natural gas for electric power production also decreased in 2003 following several years of large demand increases. Nevertheless, gas-fired generating capacity continued to expand.
U.S. natural gas proved reserves increased 1 percent in 2003, the fifth year in a row that reserves expanded. The majority of the reserve additions were from extensions of existing conventional and unconventional gas fields.
Several new pipelines and pipeline expansions, in addition to local growth in gas demand, contributed to increased movements on the interstate gas grid during the year.
“The Natural Gas Industry and Markets in 2003” is available on the EIA Web site at http://www.eia.doe.gov/pub/oil_gas/natural_gas/feature_articles/2005/ngmarkets/ngmarkets.pdf
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File last modified: February 23, 2005
