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General Interest EIA sees decline in U.S. gas surplus

March 4, 1996

Lower 48 Gas Production, Capacity* [58635 bytes] The Energy Information Administration predicts a shrinking surplus of gas productive capacity in the U.S. Lower 48 during 1996. However, capacity will be large enough to meet normal demand throughout the year.

Lower 48 Gas Production, Capacity* [58635 bytes]

The Energy Information Administration predicts a shrinking surplus of gas productive capacity in the U.S. Lower 48 during 1996.

However, capacity will be large enough to meet normal demand throughout the year.

EIA said the surplus will shrink because of gradually declining productive capacity and rising gas production. The shrinkage also will reflect efficiencies in natural gas markets that reduce the need for surplus productive capacity. For the first time, EIA's periodic study of Lower 48 dry gas production and productive capacity separates coalbed from conventional gas in New Mexico, the Rocky Mountains, and the Southeast.

EIA warns that exceptionally high peak day or peak week heating or cooling demand may exceed its outlook for gas productive capacity. In addition, production may be reined by other factors such as pipeline capacity.

Nonetheless, the gas industry has developed methods to meet peak demand such as deliveries from storage and peak day shaving.

Some producing states-Oklahoma and Louisiana, for example-may not be able to meet their historical share of gas demand this year. However, U.S. gas supplies will be adequate because other areas such as the Gulf of Mexico Outer Continental Shelf will continue to show a surplus productive capacity.

EIA pointed out that surplus productive capacity is needed to respond to changes in demand caused by weather and other factors, although increased imports and gas storage volumes in recent years have improved the flexibility of the supply system.