Demand expected to rise

Demand expected to rise


Consumers already are laying the groundwork for a rise in demand for the fuel over the next decade. Power plants are converting to natural gas from coal, which emits more greenhouse gases when it’s burned. Petrochemical makers and other manufactures are building new facilities to take advantage of the abundant gas.

The Center for Energy Economics has one model that shows gas demand rising from about 70 billion cubic feet per day now to about 109 billion cubic feet per day in 2030. Foss said that the price of gas would fluctuate as higher prices drove more production, but predicted it could trade as high as $6 by 2017 or 2018.

Simmons & Co.’s demand projections through 2020 follow a similar curve, but the price for gas doesn’t rise as high in the near future. If prices were to rise above $4.50 for an extended period, Hammond said, drillers would open up in plays that aren’t seeing much action now. The new gas would drive down prices.

That’s a trend that’s expected to hold for the coming years as well, said Robert Ineson, a natural gas expert with IHS. Even in existing plays, new wells are seeing sometimes as much as 20 percent to 30 percent gains in efficiency, he said. Those gains could offset the expected decline in associated gas production if oil prices stay low.

Ineson agreed that demand will grow rapidly, but said so far, it isn’t growing as fast as producers’ ability to pull gas from the ground.

“As much as that prevails and producers hope for higher prices, we keep defeating price pressure with more and more supply,” he said. “Longer-term, medium-term trends – the things we’re looking at seem to balance each other out.”

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