Natural Gas Demand in the United States

Demand for natural gas in the United States has more than doubled over the last twenty years, while supply has been flat. The existing producing gas fields are being exhausted. To maintain production companies like, Western Pipeline Corporation, are extracting gas more efficiently from existing wells and using advanced technology to find more wells to drill.

There are many environmental and economic benefits associated with natural gas. Natural gas produces no emissions of sulfur dioxide or particulate matter and much lower levels of greenhouse gases and nitrogen oxides than oil and coal. The impact on water quality is far less also as it produces no solid waste. The cleanliness of natural gas compared with other fuels combined with the high efficiency of natural gas equipment can help reduce air pollutants that produce smog and acid rain.

Natural gas is used in over 60 million homes, 78 percent of restaurants, 73 percent of lodging facilities, 51 percent of hospitals, 59 percent of offices and 58 percent of retail buildings. It’s the nation’s fastest growing energy source with expected increases in demand of 22 percent by 2030. In 2005, Americans used 21.9 trillion cubic feet while producing only 18.2 trillion cubic feet. The shortfall was met by foreign imports, predominantly from Canada where it’s easily shipped south via pipeline. But Canada’s natural gas production is also flat. It’s expected that Canada will export less natural gas as it uses more of it to extract crude oil from the oils sands in Alberta.

U.S. production of natural gas has been flat for the last 20 years. It’s estimated that there is enough natural gas in the undiscovered natural gas resources of the U.S. to last more than 47 years at current production rates. Federal lands contain the majority of this undiscovered natural gas. However, exploration on federal lands is restricted by Congress. Diversification of natural gas supply is possible using unconventional sources, such as tight sands gas, shale and coal bed natural gas.

Liquefied natural gas (LNG) imports are expected to make up a larger share of our natural gas needs. Liquefied Natural Gas is created by cooling normal natural gas to 260 degrees below zero Fahrenheit. It’s delivered via superinsulated ships and re-gasified at its destination. As demand rises the shortfalls in domestic supply will increasingly be met by LNG. A big reason LNG is gaining in popularity is because natural gas reserves held by the big Western oil companies are growing at a faster pace than their crude oil reserves. The growth rate for natural gas reserves is about 4 percent, while the growth rate for crude reserves is less than 1 percent. There are currently only five LNG terminals in the U.S. while more than 40 are on the drawing board. However, locating LNG facilities is hard because of the fear of explosions.