The Energy Information Administration (EIA), in its September outlook, said that US natural gas demand would decrease in 2021 and 2022 from 2020 levels. EIA said that gas consumption would be lower across all end-use sectors in the US except the industrial sector. EIA predicts US gas consumption to average 82.5 Bcfd in 2021, dropping 0.7 Bcfd from 2020.
For 2022, US natural gas consumption is forecast to increase slightly from 2021, driven by an increase in demand from the industrial sector, which offsets declining demand in the electric power sector. However, total consumption is expected to remain lower than the 2020 level.
The electric power sector will likely lead to the decline as high gas prices are expected to prompt them to switch to coal. According to the EIA, gas consumption by the US power sector will decline by 2.7 Bcfd this year and 0.7 Bcfd next year. Gas demand from the US industrial sector is expected to increase to 23.8 Bcfd in 2022 from 23.2 Bcfd in 2021.
