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Page added on August 10, 2017

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US EIA raises gas production estimates

Production

The US Energy Information Administration nudged up its natural gas production estimates for the fourth quarter and coming year amid rising demand from the generation sector and a boost in exports.

The agency, in its August Short-Term Energy Outlook Tuesday, raised by 840 MMcf/d to 82.1 Bcf/d its natural gas marketed production estimate for the US in Q4 2017.

“US natural gas production growth is expected to accelerate over the next two years, with growth rates over 2% in 2017 and over 5.5% in 2018,” said EIA Acting Administrator Howard Gruenspecht in a statement accompanying the outlook.

“Forecast record natural gas production in 2018 coincides with an expected rise in electricity generation from natural-gas fired power plants and a 23% increase in US natural gas exports,” he added.

From 2017 to 2018, EIA projects US gross exports of gas will rise to 10.62 Bcf/d from 8.66 Bcf/d. The 2018 estimate is up 5.3% from the prior forecast.

The agency raised its production estimate 210 MMcf/d to 78.91 Bcf/d for full-year 2017, and raised its 2018 estimate 1.01 Bcf/d to average 83.3 Bcf/d.

Overall, it forecast that dry gas production would average 73.5 Bcf/d in 2017, up 1.2 Bcf/d from 2016 levels, and that gas production in 2018 would rise 3.9 Bcf/d above the 2017 level. EIA, however, lowered its Q3 production estimate 150 MMcf/d to 79.65 Bcf/d.

SPOT PRICE FORECAST PULLS BACK

Short-term natural gas price estimates were lowered from July’s outlook, although EIA is still expecting prices to rise in 2018 on growing consumption and exports.

EIA lowered its forecast for Q3 Henry Hub natural gas spot prices to $2.99/MMBtu, 9 cents below its July estimate, and lowered its Q4 estimate to $3.17/MMBtu, 7 cents below its July estimate.

“Higher natural gas exports and growing domestic natural gas consumption in 2018 contribute to the forecast Henry Hub natural gas spot price rising from an annual average of $3.06/MMBtu in 2017 to $3.29/MMBtu in 2018,” the report said. Those figures were trimmed from EIA’s July forecast by 4 cents and 11 cents, respectively.

Acknowledging the pressure that constrained pipeline takeaway capacity has had on Dominion South basis prices, EIA said that Dominion South basis swaps could remain near minus $1/MMBtu without new takeaway capacity.

“However, the [US] Federal Energy Regulatory Commission certified several new natural gas pipeline projects for the region earlier this year. Once new capacity comes online, especially from the Atlantic Sunrise and Rover pipeline projects, the basis swap with Henry Hub could narrow,” the report said.

EIA lowered its gas consumption estimate in Q4 by 550 MMcf/d to 77.3 Bcf/d, while raising its Q3 estimate 220 MMcf/d to 65.52 Bcf/d. Full-year consumption estimates also were tapered for 2017, down 240 MMcf/d from last month’s estimate to an average of 72.62 Bcf/d for the year. Full-year 2018 consumption estimates shifted up 0.21 MMcf/d to 75.79 Bcf/d.

COLDER WEATHER PUSHES UP GENERATION IN 2018

“Forecast generation grows by 1.8% in 2018 based largely on a forecast of colder [weather] during the first quarter 2018 compared with the same period of 2017 and on the expectation of a growing economy,” the report said.

In its look at the continued tug-of-war between coal and gas as power plant fuels, EIA forecast that gas’ share of utility scale power generation would fall to about 31% in 2017 from an average of 34% in 2016 amid higher gas prices, increased generation from renewables and coal and easing power demand.

EIA forecasts that coal’s share of the generation pie would grow to nearly 32% in 2017 from 30%. Coal and gas will fuel roughly the same proportion of generation the following year, the agency estimated.

Platts



6 Comments on "US EIA raises gas production estimates"

  1. bigtard on Thu, 10th Aug 2017 8:33 am 

    guys this is new to me. I was aware that they developed indoor growing independently of my own invention of lazy man farming. my ultimate goal is to transform ag. into manufacturing. ag. in nature leaves too many variables to nature and because nature is infinitely complex, we can not anticipate what comes next in its sleeves.

    we can not be subjected to the whims of nature. we must define our own parameters through science, math, engineering. we must manufacture our food.

    Using robots is the new and exciting breakthrough here. This is why i wrote this comment.

    http://www.dailymail.co.uk/sciencetech/article-3426900/The-ROBOFARM-open-Japan-Entirely-autonomous-factory-produce-30-000-heads-lettuce-day-increase-half-million-5-years.html

    This is way better than lazy man farming because lazy man farming is still technically not part of the manufacturing domain.

    But we need to make this mobile so we can feed the armies of women who will be enlisted to kill extremist tard preachers and their fantards.

  2. Sissyfuss on Thu, 10th Aug 2017 9:13 am 

    I knew it, Bigaous Tardanous. You’re a bot pushing your bot agenda on us unwitting bipedal hominids. AI will teach the bots to wipe their asses on the lettuce much like the immigrants do today. In time the bots will learn to eat the lettuce leaving the humans to live off SOYLENT GREEN in many amazing flavors. I was a Paultard but now I’m a Bigtard aficionado. So much easier than thinking.

  3. Cloggie on Thu, 10th Aug 2017 9:33 am 

    I was a Heinbergtard and a Paultard too, now I’m a hydrogentard.

  4. Anonymous on Thu, 10th Aug 2017 10:58 am 

    High volume and low prices. That is a supply revolution. Shale kicks ass for gas.

    There’s a reason why Rockman ain’t drilling gas wells in the GOM. It’s because the Marcellus supplies gas cheaper.

    Gas has been a stunning development and Peak Gas people like Hiughes or skeptics like Berman have major egg on their faces.

  5. rockman on Thu, 10th Aug 2017 11:53 pm 

    A – “There’s a reason why Rockman ain’t drilling gas wells in the GOM.” Exactly. When we started the company about 8 years ago we spent $230 million (just our share…over $400 million total) drilling deep wells in south Louisiana for condensate rich conventional NG reservoirs. Since prices fell below $4/MCF we haven’t spent a single $ drilling for NG.

  6. GregT on Fri, 11th Aug 2017 12:26 am 

    “I was a Heinbergtard and a Paultard too, now I’m a hydrogenatard.”

    Good for you Cloggie, the first step towards rehabilitation, is acceptance.

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