AGA: U.S. GAS DEMAND WILL ADVANCE 3.4% IN 1995

The American Gas Association predicts U.S. natural gas consumption in 1995 will increase 3.4% from the estimated 1994 level. In its base case forecast, AGA said natural gas use will increase to 22.5 quadrillion BTU (quads) in 1995 from 21.7 quads in 1994. That assumes normal weather, a growth rate of 2.9% in the U.S. economy, and crude oil prices averaging $17.50/bbl.

Dec. 19, 1994

2 min read

The American Gas Association predicts U.S. natural gas consumption in 1995 will increase 3.4% from the estimated 1994 level.

In its base case forecast, AGA said natural gas use will increase to 22.5 quadrillion BTU (quads) in 1995 from 21.7 quads in 1994. That assumes normal weather, a growth rate of 2.9% in the U.S. economy, and crude oil prices averaging $17.50/bbl.

AGA Chairman Robert Catell, who also is chairman and chief executive officer of Brooklyn Union Gas Co., New York, said the expected increase will continue an 8 year trend that has seen gas consumption rise more than 30% since 1986.

Catell cautioned that weather conditions, the rate of economic growth, and oil prices are uncertainties that will strongly influence gas demand,

THREE SCENARIOS

AGA projects low, base, and high case scenarios for 1995 gas demand, with low case demand increasing by 1.4% and high case demand rising 5.4%.

Industrial demand is expected to increase nearly 0.3 quads in the base case, with 0.2 quads of growth in t e residential sector and 0.1 quads in the commercial and electric utility sectors.

The industrial sector, which consumes the most natural gas, is projected to reach 8.6 quads in 1995 in the base case projection, a 3.2% rise. This increase is a result of continued growth in U.S. manufacturing, along with new gas fired cogeneration projects planned to go on fine.

While in the base case the industrial sector is expected to provide the most growth by volume, the residential sector is expected to provide the largest percentage growth, 3.8%.

The high case assumes a 5% colder than normal winter, a 3.5% growth in the economy, and oil at $19.50/bbl, while the low case assumes winter weather 5% warmer than average, a 2% economic growth rate, and crude oil at $15.50/bbl.

PRODUCTIVITY GAINS

Catell said another AGA study shows gas transmission and distribution companies have made significant productivity gains during the past 10 years.

"The natural gas delivery system is streamlined, more efficient, and more cost competitive, while at the same time it is delivering an even higher quality of service to American consumers," he said.

Catell said transmission and distribution margins have declined by nearly 7% during the past decade. In inflated adjusted dollars, that translates into more than a 30% increase in transmission and distribution industry productivity, he said.