Natural Gas Issues & Trends: 1998

Naruc Winter Conference

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This presentation was given before the National Association of Regulatory Utility Commissioners (NARUC*) Winter Meeting held in Washington, February 21-24, 1999. It provides an overview of EIA’s insight into various trends and developments now occurring in the U.S. natural gas marketplace and a discussion of a number of topics such as natural gas prices, production levels, exploration and development activities, imports, exports, storage, transportation, and consumption. It also presents an overview of EIA’s current initiative to redesign and refocus future data collection efforts to address the impact that industry restructuring has had on completeness of current industry coverage.

* The NARUC Natural Gas Committee provides an ongoing forum for States to promote the uniformity of regulation of public utilities and to further cooperative efforts among States concerning the safe operation and supervision of public utilities and carriers. The Committee also promotes cooperative efforts between of the State utility commissions and Federal counterparts.

Table of Contents

Overview

Natural Gas Consumption Is Expected to Increase About 50 Percent by 2020

Consumer Prices Declined Substantially from 1980's Peak Prices

Demand Growth is Expected if  More Seasonal   Conditions Return

Inventory Levels Going into This Winter Were Higher than Historical Ranges

Wellhead Prices Have Been Trending Down Since April, 1998

Price Volatility Increased As Beginning Heating Season Storage Levels Declined

Strong Growth in Natural Gas Usage Is Projected for Electricity Generation

Most Capacity Additions Will Be Fueled By Gas

Growing Demand Leads to Rising Natural Gas Prices

Residential, Commercial Gas Prices Are Projected to Decline

Net Imports of Natural Gas Are Projected to Increase

U.S. Reserve Additions Have Exceeded Natural Gas Production for the Most Recent 4 Years

Most Natural Gas Production Is Expected From Conventional Sources

Deep Water Production, Small but Growing

U.S. Onshore and Offshore Finding Costs Are Comparable

Cycle Time for Deep-Water Projects Has Declined

Released Capacity Has Increased

Shippers Are Expected to Turnback Unneeded Capacity When Contracts Expire

Value of Corporate Combinations Has Increased

Top 20 Natural Gas Marketers:  Growth in Volume Outpaces Growth in Share

Summary

Coverage of Consumer Prices will Continue to Decline in the Future

Natural Gas 1998: Issues and Trends

Author: Joan Heinkel