Natural gas

Natural gas production
Low natural gas prices are reducing natural gas production in the United States. We expect U.S. dry natural gas production to fall by 2% from 1Q24 to 2Q24, with natural gas production in June averaging 102 billion cubic feet per day (Bcf/d), down 4% from the monthly record set in December 2023. Production is falling as some producers have announced curtailments because of low natural gas prices. In addition, a wide difference between the price of natural gas and petroleum products is encouraging producers to extract higher-value hydrocarbon gas liquids (HGLs) from the natural gas stream.

We expect dry natural gas production in the United States will be down 1% this year compared with last year before production rises by 2% in 2025 to a record of almost 105 Bcf/d. The increase in production next year is the result of our forecast of rising natural gas prices, which will create an incentive for more drilling in dry natural gas production regions. Increases in crude oil production in our forecast next year also result in more associated natural gas production. We expect the gap between natural gas and petroleum prices will narrow in 2025, which could keep more HGLs in the natural gas stream next year.

Natural gas consumption
We forecast U.S. natural gas consumption in 2024 will be unchanged from last year, averaging 89 Bcf/d for the year. Small consumption increases in our forecast occur in the residential, commercial, and electric power sectors, and those increases are offset by a slight year-over-year decline in industrial sector consumption of natural gas.

In May 2024, we forecast natural gas consumption to average 72 Bcf/d, 3% less than in May 2023. The decrease from May 2023 mostly reflects our expectation of less natural gas used to generate electricity because of cooler temperatures and more generation from renewables. Less natural gas is typically consumed in May in the United States than in other months of the year because demand for space heating declines and demand for air conditioning brought on by warmer weather has yet to increase.

Following the year-over-year drop in natural gas consumption in May, we forecast relatively flat consumption through the end of next year. We forecast that U.S. natural gas consumption will average 88 Bcf/d in 2H24, about 1% more than in 2H23. The increase comes mostly from the residential and commercial sectors. We expect the sectors to consume 7% more because our forecast assumes that 4Q24 will be colder than 4Q23, which was very mild, increasing demand for space heating.

Natural gas consumption for electric power
The availability of more electricity generation from renewable sources, particularly solar, in 2024 compared with 2023 is preventing growth in natural gas consumption beyond 2023 levels. Despite our expectation that 3% more electricity will be generated in the United States this summer (May–September) compared with last summer, we forecast that natural gas consumption in the electric power sector will be about the same as last summer, which saw the most power sector consumption on record. U.S. natural gas consumption for electricity generation typically peaks in the summer months as warm temperatures increase air-conditioning use.

Similar to last year, natural gas-fired electric power generation this summer is driven by both declines in coal-fired electricity generation due to retirements and more overall electricity generation because of warmer-than-normal temperatures in our forecast. We also expect low natural gas prices will encourage the dispatch of natural gas-fired power plants. These factors help keep U.S. natural gas consumption to generate electricity near last year’s record.

In the summer of 2025, we forecast natural gas consumed for electricity generation will again average about 41 Bcf/d, as trends toward growing electricity demand, less coal-fired generation, and more renewables generation continue.