On New Year’s Day 2018, the US natural gas market consumed more natural gas than ever before.
The new record has been made possible by a strong natural gas supply position that, coupled with an extensive production and delivery system, ensures reliable supplies for consumers.
On January 1, 2018, the US lower-48 consumed a total of 144.7 billion cubic feet (Bcf) of natural gas as record cold temperatures drove heating demand across much of the country, per preliminary data from Bentek/S&P Global.
The new record reflects the structural changes in the natural gas market, including increased use of natural gas for power generation, industrial manufacturing, pipeline exports to Mexico, and feedgas for LNG exports.
Residential and commercial demand neared an all-time high on January 1. Driven by the intense cold, heating demand helped push residential and commercial natural gas consumption to 76.4 Bcf for the day, just shy of the record 77.5 Bcf established in January 2009.
Supplies remain strong. Production, which is still flowing at high levels, has been affected somewhat by the cold as well freeze-offs have led to some shut-ins. Dry gas flows across the lower-48 fell from 77.2 Bcf to 71.9 Bcf between December 27, 2018, and January 1, 2018. These events are temporary, and production will recover when temperatures finally ease.
Despite this, the supply portfolio has been strong. Natural gas storage has been critical in meeting requirements, serving 43 percent of the gas delivered. Imported natural gas via pipeline from Canada and even imported LNG bolstered the US supplies.
Monday demonstrates not only the reliability and affordability of natural gas but also the sheer scale of energy delivered to consumers when they need it. Let me illustrate.
How much natural gas was delivered on New Year’s Day? About 134 billion cubic feet of natural gas was delivered to end-use customers Monday (excludes exports and pipeline losses).
The rate at which this amount of natural gas flows chemical energy to homes and businesses is equivalent to 1,700 gigawatts. By comparison, the entire US electrical grid today is only 1,000 gigawatts.
This back of the envelope calculation is meant to show the relative scale of how much energy the US natural gas system delivers and how important gas infrastructure is to provide the heat for homes during the worst of winter cold.
Monday’s record is impressive, no doubt. With much of the 2017-2018 winter still ahead of us, I wonder if new records await.