Natural gas

Natural gas consumption
We forecast U.S. natural gas consumption in September to average 80.5 billion cubic feet per day (Bcf/d), a record high for September and up 5% from the previous record set in September 2022. Based on our estimates, September would be the third straight month of record natural gas consumption in the United States, after records in July (86.5 Bcf/d) and in August (86.7 Bcf/d).

The increase in natural gas consumption in the summer has led to a slight increase in U.S. natural gas consumption in 2023. We forecast U.S. natural gas consumption to average 89.7 Bcf/d for all of 2023, up 1% from 2022. Annual U.S. natural gas consumption set its previous record high in 2022, averaging 88.6 Bcf/d for the year.

Electric power sector consumption of natural gas
We forecast natural gas consumption in the U.S. electric power sector will average 40.1 Bcf/d in September, a record for the month and an increase of 7%, or 2.7 Bcf/d, from the previous record set in September 2022. Natural gas consumption for electric power also set monthly records of 47.3 Bcf/d in both July and August, based on STEO estimates. We forecast U.S. natural gas consumption in the electric power sector to average 35.3 Bcf/d for all of 2023, an increase of 6%, or 2.1 Bcf/d, from the previous record set in 2022.

In the United States, natural gas provides most of the fuel for the increase in summer electricity generation. U.S. natural gas consumption for electric power has set records the past two summers as hot weather has increased demand for air conditioning across the country, particularly in largely populated areas such as Texas, Florida, and Southern California. Increases in air-conditioning demand have led to increases in overall electricity generation. The portion of electricity generation that comes from natural gas has also risen the past two summers reflecting a decline in coal-fired electricity generation, resulting from the retirement of coal-fired power plants. In 2023, natural gas prices for the electric power sector have averaged about $2.65/MMBtu from June through August, making natural gas a more competitive source of electricity generation compared with coal. In addition, several new natural gas-fired power plants entered service in 2022 and 2023, which increased the electric generation capacity available from natural gas.

In 2024, we forecast annual U.S. natural gas consumption in the power sector to decline between 1 to 2 Bcf/d in (about 4%) compared with 2023. This decline reflects competition from growing electric generation capacity from renewable energy sources, and it drives a small decline in total natural gas consumption next year.