1. April 4, 2014
After the Polar Vortex: Recalibrating Key Natural Gas Supply, Demand and Market Issues
AGA Communications Committee
Bringing it Home

2. 2013-2014 Winter Heating Season
Cold everywhere east of the Rockies Front; Cold for sustained periods; Cold in areas that consume large volumes of winter weather-induced gas supply
January 2014 – Highest natural gas consumption month on record at 3.2 Tcf with highest consumption day (139 bcf) on January 7th – a strong consumption day had been more recently about 110 Bcf
January 2014 – Highest daily average natural gas to power generation on record for a winter heating season month (21.4 Bcf/d) and highest peak day demand for power gen during winter heating season on January 7th (31 Bcf)
January 2014 – largest net withdrawal of working gas for a month at more than 950 Bcf, surpassing previous record of 847 Bcf set in January 2003
Natural gas touches nearly every segment of American life—residential and commercial as well as industrial and electricity generation.
It is the dominant source of energy for heat, hot water and cooking in homes and businesses.
It is used as a feedstock and for other production purposes and to generate electricity.
It is also used as a transportation fuel, today primarily for fleet vehicles.

3. Peak Day Natural Gas Supply and Disposition – January 7, 2014
Peak Day Avg. 2008/2010/2012 1/7/14 %
Domestic Natural Gas Supply (Bcf/d)
Dry Gas Production *
Canada Imports (Net)
LNG Imports
Underground Storage (Net)
Consumption by End-Use Sector (Bcf/d)
Residential/Commercial ** +40
Industrial
Electric Power
Mexico Exports
Pipeline/Transportation
Total **
*Well freeze-offs in Eastern US and Mid-Continent reduced daily production about 4 Bcf/d. Production essentially recovered in one week.
**Record consumption volume.
Source: Bentek Energy, LLC.
Natural gas touches nearly every segment of American life—residential and commercial as well as industrial and electricity generation.
It is the dominant source of energy for heat, hot water and cooking in homes and businesses.
It is used as a feedstock and for other production purposes and to generate electricity.
It is also used as a transportation fuel, today primarily for fleet vehicles.

4. North American gas demand (Bcfd)
Source: Bloomberg New Energy Finance

5. Base case – North American production outlook by area
Dry gas production (Bcfd) Rig count, select areas
Source: Bloomberg New Energy Finance Note: Rig count should not be viewed as comprehensive as we do not model every play.

6. Natural Gas Production

7. Unconventional Natural Gas Production in North America

8. U.S. Natural Gas Consumption and Reserves (trillion cubic feet)
The supply side of the equation has seen the most tremendous change during the last decade, and most of that has been concentrated in the past couple of years.
In terms of the resources under the ground, what was once viewed as unrecoverable has changed as technology has improved. Now, resources previously unmarketable are now economically viable. This had fundamentally altered the resource landscape. Natural gas reserves ten years ago were viewed as declining, and that the U.S. would have to rely upon foreign sources of supply. Today, the growth in production and the abundance of natural gas resources has shifted the dynamic. We are now even talking about exporting natural gas – a proposition that was unthinkable even a few years ago.
2012 is set for another record year. Production has declined as price have dropped – a perfectly rational response in the market place. Lower prices means fewer drilling rigs seeking to produce new resources. But the continued growth and stability of production has fundamentally altered the landscape.
Source: Energy Information Administration, U.S. Department of Energy.

9. Outcrop – Utica Shale
Source:

10. Short-Term Expectations Domestic Natural Gas Price

11. Find Us Online Christopher McGill Vice President Policy Analysis
Christopher McGill
Vice President Policy Analysis