In a week which has rocked worldwide oil prices, the latest federal statistics show that daily U.S. natural gas production rose yet again in 2019, likely ensuring continued historic low prices for gas used in power generation.
The U.S. Energy Information Administration reported this morning that domestic natural gas production rose by 9.8 billion cubic feet (Bcf/d) per day in 2019, a 10-percent increase over the previous year. Average daily marketed gas production hit 99 billion Bcf/d for the year, with dry gas accounting for 92 Bcf/d of that.
These numbers are new highs, according to the EIA. Moreover, the volume of U.S. natural gas exports also increased. The export average was 12.8 Bcf/d in 2019, both from liquefied natural gas and pipelines.
The low is where natural gas prices are, pushed down by the massive supply reserves. The January natural gas spot price at the Henry Hub on the Louisiana coast was $2.02 per million British thermal unit (Btu), less than a fourth of what it was 14 years ago.
Numerous companies are building out LNG liquefaction and export terminals along the U.S. coasts, primarily in the Gulf of Mexico. These are taking in shale gas and associated gas production reaching unprecedented volumes due to hydraulic fracturing and deeper, directional drilling.
Many LNG export entrepreneurs are working or have completed deals to ship U.S. gas to other nations for re-gasification and, ultimately, power generation or home heating. These global LNG agreements include Vietnam, Spain, Africa and Japan, among others.
New , south-bound U.S. pipelines also are delivering natural gas to Mexico to fuel power generation plants there.
Natural gas fuels 38 percent of the U.S. electricity generation mix, according to a recent report from the EIA. Gas is expected to surpass 40 percent of that mix this year, with several new combined cycle gas turbine plants under construction.
Natural gas accounts for more than 50 percent of Mexico’s power generation portfolio, according to reports.
Earlier this week, a price war between oil producers Russia and Saudi Arabia drove down the price of crude oil by 20 percent or more. This global economic battle, combined with falling demand and fears over the coronavirus, was severely pinching U.S. producers which saw their stock prices plummet.
(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177).
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Gas-fired turbines, technologies and LNG will be part of the content offered at POWERGEN International happening December 8-10 in Orlando. Former Energy Secretary Rick Perry will be one of the keynote speakers.