AGA: U.S. GAS DEMAND WILL RISE IN 1991

The American Gas Association estimates U.S. natural gas demand will rise 2.6% to 19.4 quadrillion BTUs in 1991 despite a flat economy. Demand was down this year, slipping to 18.9 quads from 19.3 quads in 1989. AGA Chairman William McCormick Jr. said demand will grow next year if there is a return to normal winter weather patterns, increases continue in residential and commercial heating conversions, the industry retains "switchable" customers, and use of gas for power generation grows.

Dec. 24, 1990

2 min read

The American Gas Association estimates U.S. natural gas demand will rise 2.6% to 19.4 quadrillion BTUs in 1991 despite a flat economy.

Demand was down this year, slipping to 18.9 quads from 19.3 quads in 1989.

AGA Chairman William McCormick Jr. said demand will grow next year if there is a return to normal winter weather patterns, increases continue in residential and commercial heating conversions, the industry retains "switchable" customers, and use of gas for power generation grows.

AGA forecast an increase of 0.2 quads to 4.8 quads in the residential market, 0.1 quads to 2.8 quads in the commercial market, 0.1 quads to 8.9 in the industrial market, and 0.1 to 2.9 quads in power generation.

It said if oil prices fall to pre-Middle East crisis levels of less than $20/bbl, if there is a sharp recession, and if winter weather is warmer than normal, gas demand in 1991 could be only 18.9 quads, the same as in 1990.

McCormick said gas also is expected to maintain its price advantage in 1991. The Energy Information Administration's latest projections estimate gas prices to residential customers will be 35% less than heating oil next year and 75% less than electricity.

EIA has estimated gas will make substantial demand gains in 1991, projecting a market of 19.8 quads next year, 2% more than AGA's projections.

AGA said supplies and deliverability will be more than adequate during peak demand periods in the 1990-91 winter.

It predicted that 1991 natural gas production will increase 0.2 quads to 18.1 quads in 1991. That's about 17.6 tcf.

AGA said reserve replacements in 1990 will be nearly 100%-up from 95.4% in 1989-even though counts of active rigs and well completions were almost half the levels of 1985.