Record Gas Demand Means Higher Prices

Fortnightly Magazine - February 15 1998
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RDI'S NEW STUDY, THE CONVERGENCE OF GAS AND POWER: Causes and Consequences, projects gas consumption in the United States will grow 2.4 percent per year, or a 26.8-percent increase from 1998 to 2007.

Overall, demand is expected to grow from 20.5 trillion cubic feet in 1998 to 26 Tcf in 2007. More than half of this projected growth will come from electric industry demand for gas, which will increase from 4.1 Tcf in 1998 to 6.9 Tcf in 2007, or 5.3 percent per year.

The jump in gas consumption is linked to the electric industry's limited range of choices for new capacity. Since an increase in nuclear capacity is unlikely and environmental concerns limit coal's potential, gas remains the industry's only alternative. This demand for gas will continue to press the market even after pending supply and infrastructure projects come on line. (See figure "Wellhead Capacity and Production.")

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