U.S. Natural Gas Demand Grows


In recent years, natural gas consumption in the commercial, electric power and residential sectors has leveled off, according to the Energy Information Administration. However, one sector continues to consume increasingly large amounts of the resource: industry.

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This year, industrial enterprises will use 21.04 billion cubic feet of natural gas per day. In 2017, that number is expected to rise to 21.33 bcf. Though this is well off the peak industrial natural gas consumption rate of 23.3 bcf recorded in 1997, this continued growth signals good news for producers trying to navigate slowing market conditions, Jude Clemente, a principal at JTC Energy Research Associates, reported for Forbes.

Why is the industrial sector driving U.S. natural gas consumption? A number of factors propel this trend.

Homeowners flock to suburbs

For one, American homebuyers – especially those between the ages of 18 and 34 – are leaving packed metropolitan areas in search of spacious suburban properties, according to the National Association of Realtors. This has increased the need for new infrastructure projects, most of which require the assistance of asphalt and steel-producing industrial enterprises. Of course, these companies are still doing plenty of work within American cities, which collectively house more than 62 percent of the U.S. population, the Census Bureau reported.

Consumer confidence rises

The industrial sector has also benefited from improved consumer confidence, as Americans continue to shake off budgetary worries and crack open their pocket books. Over 2016, the consumer confidence index has remained steady at around -12, a vast improvement over the numbers recorded immediately after the recession, which hovered near -30 and dropped as low as -65, according to data from Gallup. Today, Americans spend an average of $102 per day and much of this cash goes toward appliances, electronics and other consumer products, all of which contain components direct from industrial enterprises.

Companies specializing in plastics have seen the biggest gains. The U.S. plastics market now produces $380 billion in exports per year, according to the Plastics Industry Trade Association. This figure will surely increase, as the global demand for plastics is expected to continue to grow at an annual rate of 4 percent. These gains have fueled demand for the colorless, odorless natural gas ethane, which is used in the production of plastics of all kinds, including ethylene and polyethylene.

With builders, consumer product producers and others continually tapping industrial enterprises for resources, it seems industrial natural gas consumption rates will continue to increase and buoy the natural gas industry, predicts EIA.









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