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Today in Energy

March 10, 2021

U.S. natural gas consumption was lower in 2020 in all sectors except electric power

annual U.S. natural gas end-use deliveries by sector
Source: U.S. Energy Information Administration, Natural Gas Monthly
Note: This graph does not include end-use deliveries of natural gas for vehicle fuel because they represent only a fraction of 1% of total end-use deliveries.

U.S. natural gas end-use deliveries in 2020 decreased in three out of four consuming sectors relative to 2019, according to the U.S. Energy Information Administration’s (EIA) Natural Gas Monthly. Despite mild winter weather and the economic effects of COVID-19, the second-highest annual amount of natural gas was delivered in the United States to end users in 2020, averaging 75.8 billion cubic feet per day (Bcf/d) for the year. The highest annual amount of natural gas consumption in the United States occurred in 2019, when end-use deliveries reached 77.6 Bcf/d.

The electric power sector consumed the most natural gas of any sector—31.7 Bcf/d in 2020, a 2% increase from the previous year. In 2020, natural gas prices were the lowest they had been in decades. Lower natural gas prices made natural gas more competitive in the electric power sector, especially compared with coal. Natural gas-fired electricity generation has been growing throughout the United States. Natural gas-fired generation replaced much of the lost generation from coal plant retirements in recent years, making natural gas the largest input fuel for power generation nationally. Natural gas accounted for nearly 40% of all power generation in 2020, accounting for more generation than coal and nuclear, the next two largest sources, combined.

U.S. industrial consumption of natural gas decreased 2% in 2020. COVID-19-related closures and less demand reduced industrial consumption for much of the year. Industrial natural gas consumption has increased in 8 out of the past 10 years because of growth in dry natural gas production and relatively low natural gas prices.

Weather patterns have been the primary drivers of residential and commercial natural gas consumption volumes in the United States. Economic patterns also affect U.S. commercial natural gas consumption. The winter months of 2020 (January–March 2020 and November–December 2020) were milder than the previous two winters in the United States, resulting in less heating demand. Natural gas consumption in the commercial sector, which includes restaurants, hotels, and schools, decreased by 11%.

A small amount of end-use deliveries of natural gas go to the U.S. vehicle fuel sector, representing about 0.2% of total deliveries in 2020. In addition, a substantial volume of natural gas is consumed through producing, processing, and distributing natural gas. EIA considers these volumes as a component of total consumption, but they are not included in the end-use delivery sectors that EIA reports.

Principal contributor: Mike Kopalek