By the OGJ Online Staff
WASHINGTON, DC, June 15 -- US natural gas producers are ready to meet the demand of the upcoming winter heating season, with market fundamentals for gas supply strong, the American Gas Association said Thursday.
"Since 1990, the number of rigs actively drilling for natural gas has doubled, annual domestic natural gas production has grown more than 2 tcf, and pipeline capacity has grown nearly 30%, from 74 bcfd to 94 bcfd," said Chris McGill, AGA managing director for policy analysis. "These are very strong fundamentals, which indicate a solid market response by the gas industry to increasing customer demand for this efficient, domestic fuel."
The report updates a snapshot of natural gas market conditions prepared last year by AGA's Policy Analysis division. Using 1990, 2000, and a 2001 estimate as reference points, the report highlights trends in various supply indicators (gas resources, reserves, non-producing gas reserves, domestic gas production, gas rigs operating, gas well completions, working gas in storage, Canadian imports, liquefied gas imports, other supplementals, and pipeline capacity).
"North America holds a vast supply of potential natural gas resources. The challenge is producing natural gas in sufficient quantities to meet growing customer demand, and ensuring that the pipeline delivery system expands enough to get the gas where it's needed," said McGill.
In an updated, longer-term report also issued Thursday, AGA predicted natural gas demand will increase by 53% over the next 20 years.
The report, Fueling the Future, originally was released in February 2000. It predicted a 62% increase in demand over the 20 years, in part because it assumed only modest fluctuations in natural gas prices, remaining in the mid-$2/MMbtu range ($ 2000).
The updated report assumes wellhead prices will be 36% higher, reaching $3.60 ($ 2000) by 2020.
Both reports assume the implementation of government policies to reduce barriers to increased use of natural gas, the adoption of policies to promote its use, continued increases in the efficiency of natural gas equipment, and advances in exploration and production technology.