Gas Produced Here Stays Here

The U.S. Energy Information Administration (EIA) recently confirmed what has become fairly obvious over recent years. When it comes to natural gas, most of what’s produced here, stays here – with more than 90% of the natural gas consumed in the United States last year produced domestically.

U.S. natural gas production and consumption have both generally increased since the mid-2000s, and both dry gas production and consumption reached record highs of about 30 trillion cubic feet (Tcf) in 2018. In both 2017 and 2018, annual dry natural gas production exceeded consumption for the first time since 1966.

U.S. natural gas production has increased in the past decade as the widespread adoption of horizontal drilling and hydraulic fracturing techniques has allowed producers to more economically produce natural gas from shale formations. Shale gas now makes up a higher percentage of total U.S. natural gas production than natural gas produced from both traditional natural gas wells and from crude oil wells as associated natural gas. Smaller volumes of natural gas are also produced from coalbed methane.

U.S. natural gas production and consumption have both generally increased since the mid-2000s, and both dry gas production and consumption reached record highs of about 30 trillion cubic feet (Tcf) in 2018.

In 2018, gross withdrawals of natural gas and other compounds extracted at the wellhead in the United States totaled 37 Tcf, with more than half coming from shale gas wells. Marketed natural gas production, which excludes natural gas used for repressuring the well, vented and flared gas, and any nonhydrocarbon gases, was nearly 33 Tcf. U.S. marketed natural gas was further processed into 30 Tcf of dry natural gas and 2 Tcf of natural gas plant liquids.

As U.S. natural gas production has increased, exports of natural gas have also increased and recently have started to surpass natural gas imports. The U.S. became a net exporter of natural gas in 2017. Last year, the U.S. exported a record of nearly 4 Tcf of natural gas, either by pipeline to Mexico and Canada or shipped overseas as liquefied natural gas (LNG). Natural gas imports that year were 3 Tcf, the lowest since 2015.

In the U.S., significant amounts of natural gas are also added to or withdrawn from storage throughout the year. Natural gas is injected to storage during periods of low demand, typically during the spring and fall, and is withdrawn from storage during periods of high demand, typically in the winter and summer. Natural gas is stored in large volumes in underground facilities and in smaller volumes in above-ground tanks, sometimes as LNG.

In 2018, more than two-thirds of the dry natural gas consumed in the United States was used by the electric power and industrial sectors. Smaller amounts of natural gas were consumed by the residential, commercial, and transportation sectors; exported to other countries; or added to storage.

The U.S. electric power sector has been the largest end user of natural gas in three of the last four years, surpassing the industrial sector for the first time in 2012. In 2018, about 35% of the natural gas consumed in the United States was used by the electric power sector to generate electricity and heat.

The industrial sector consumed 34% of natural gas in 2018 for process heating; as fuel for combined heat and power plants; and as raw material (feedstock) to produce chemicals, fertilizer, and hydrogen. The residential and commercial sectors use natural gas mainly for heating.

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