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Ohio Utica Shale

Cold weather triggers winter gas consumption record, EIA says

By Bob Downing Published: April 4, 2014

From the U.S. Energy Information Administartion on Thursday:

Natural gas consumption sets winter record, with residential/commercial sectors surpassing 50% share

Total natural gas consumption in the United States rose to a record average of 90.6 billion cubic feet per day (Bcf/d) this winter, according to data from Bentek Energy. Cold weather drove total consumption up by 8% over last winter's levels, despite higher prices. Increases occurred in all major natural gas sectors, but particularly among residential and commercial consumers, whose combined consumption rose to more than half of total U.S. consumption this winter.

Natural gas consumption also rose in the electric and industrial sectors, but to a lesser degree than in the residential and commercial sectors. This was largely because power generators' and industrial customers' consumption of natural gas is less sensitive to weather and more sensitive to price than is consumption from homes and businesses.

Residential and commercial consumption

The contiguous United States saw a daily average of 23.5 heating degree days (HDDs, the variation of temperatures below 65 degrees Fahrenheit) this winter, 13% more than the average for both last winter and the previous five winters. Residential and commercial consumers increased their consumption to a greater degree in response to these colder temperatures than consumers in other sectors, as most of the natural gas consumed by homes and businesses directly involves space heating. This made the residential and commercial sectors less likely to curtail consumption when prices rose to more than $5.00/MMBtu on days between the end of January and the beginning of March. Residential and commercial consumption rose by 14% this winter, driving their share of total U.S. consumption to more than 50% for the first time since the 2010-11 winter season.

Industrial sector consumption

Prolonged periods of bitterly cold temperatures this winter also contributed to higher levels of industrial sector consumption, because large industrial facilities needed additional gas for space heating. However, since like electric generators, industrial customers more frequently purchase natural gas with spot and futures contracts whose prices fluctuate daily, this winter's 33% price increase limited industrial consumption growth, which rose by only 2%, to 21.5 Bcf/d. As a result, the industrial sector's share of total U.S. natural gas consumption decreased to 24% this winter, from 25% last winter and 26% during the 2011-12 winter season.

Electric sector consumption

Similarly, increased natural gas prices limited the degree to which consumption from electric generators (power burn) rose to meet higher electric demand this winter. Although power burn grew throughout most of the United States as cold temperatures led to increased electric demand for space heating, it decreased in the Northeast and Southeast. Markets in these regions responded to higher gas prices by increasing electric generation from other power sources, such as nuclear, hydroelectric, wind, and coal, or decreasing total electric generation. As a result, power burn rose by only 1% this winter, to 19.7 Bcf/d, and its share of total U.S. natural gas consumption declined to 22% this winter versus 23% last winter and 26% during the 2011-12 winter season.

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