Last updateThu, 15 Mar 2018 4pm


Natural Gas Still Most-Consumed Fuel in Industrial Sector

The U.S. Energy Information Administration (EIA) expects a 40% increase in natural gas consumed in the U.S. industrial sector, from 9.8 quadrillion British thermal units (Btu) in 2017 to 13.7 quadrillion Btu in 2050, according to the Annual Energy Outlook 2018 (AEO2018) Reference case. By 2020, industrial natural gas consumption will surpass the previous record set in the early 1970s, according to the AEO2018 Reference case.

The U.S. industrial sector consumes more natural gas than any other sector, surpassing electric power in 2017 and the combined residential and commercial sectors in 2010. In 2017, about two-thirds of total industrial natural gas consumption was consumed for heat or power applications—either for industrial processes, such as in furnaces, or for onsite electricity generation. 

EIA: U.S. Oil Output Accelerating

The U.S. Energy Information Administration (EIA) estimates that U.S. crude oil production averaged 10.3 million barrels per day (b/d) in February, up 230,000 b/d from the January level, when there were some well freeze-offs in the Permian and Bakken. EIA has reported that total U.S. crude oil production averaged 9.3 million b/d in 2017, ending the year with production of 9.9 million b/d in December. EIA projects that U.S. crude oil production will average 10.7 million b/d in 2018, which would mark the highest annual average U.S. crude oil production level, surpassing the previous record of 9.6 million b/d set in 1970. EIA forecasts that 2019 crude oil production will average 11.3 million b/d. 

LNG Investment Down in Recent Years

“Investment in new projects to produce liquefied natural gas (LNG) fell sharply in 2016 and 2017: the industry-sanctioned under 10 million tons of annual capacity in two years, an 80 percent reduction relative to 2011–2015,” writes Nikos Tsafos from the Center for Strategic and International Studies.

“This slowdown raises many questions. Is the industry investing enough to meet future demand, and if not, will that lead prices to spike later? Governments are asking whether they should offer concessions to support projects; and if so, how far should they go, especially given pressures from constituents who were promised jobs, investment, and revenue from projects that are now stalled.” 

IEA Sees U.S. Energy Dominance into Next Decade

Oil production growth from the U.S., Brazil, Canada and Norway can keep the world well supplied, more than meeting global oil demand growth through 2020, but more investment will be needed to boost output after that, according to the International Energy Agency’s (IEA) latest annual report on oil markets.

Over the next three years, gains from the U.S. alone will cover 80% of the world’s demand growth, with Canada, Brazil and Norway – all IEA family members – able to cover the rest, according to Oil 2018, the IEA’s five-year market analysis and forecast. But the report finds that despite falling costs, additional investment will be needed to spur supply growth after 2020. 

U.S. Chemical Production Starts the Year on a Soft Note

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) fell 0.4% in January, following a 2.2% gain in December, and a 1.8% gain in November, as measured on a three-month moving average (3MMA) basis. During January, chemical output fell in all regions, with the largest declines in the West Coast, Midwest, and Mid-Atlantic regions. All data excludes pharmaceuticals.

Chemical production was mixed over the same three-month period. There were gains in the production three-month moving average output trend of other basic inorganic chemicals, industrial gases, fertilizers, synthetic dyes and pigments, and plastic resins. These gains were offset by declines in the output trend in pesticides, manufactured fibers, adhesives, coatings, organic chemicals, chlor-alkali, consumer products, and synthetic rubber. 



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