For the first time since April, weekly residential/commercial consumption of natural gas exceeded power burn, reported the U.S. Energy Information Administration. Over the past five years (2011–15), this transition in demand has occurred at the end of October on average, but this year the switch in primary consuming sector occurred several weeks later than in past years. Residential/commercial consumption in the Lower 48 states averaged 28 billion cubic feet per day (Bcf/d) during the week ending Thursday, November 24, and power burn averaged 22 Bcf/d, according to data from PointLogic.
Natural gas demand is largely driven by electricity generation fuel needs in the summer and heating needs in the winter. Electricity demand typically declines in the fall as the number of cooling degree days (CDD) tapers off. At the same time, the number of heating degree days (HDD) begins to rise as temperatures drop below 65°F. Temperatures since the beginning of September 2016 have been significantly warmer than in the past five years. The number of population-weighted HDD from September 1 through November 24 was 17% lower than last year and 28% lower than the five-year (2011–15) average for the same period. Over this same period, the weekly residential/commercial consumption of natural gas has remained at least 4% below the five-year average.
Conversely, weekly power burn has remained 8% or more above the five-year average, due to both additional cooling demand and the increased share of electricity generated by natural gas. The number of population-weighted CDD from September 1 through November 24 was 17% higher than last year and 31% higher than the five-year average over the same period. In addition to higher-than-normal temperatures, new natural gas-fired power plants have continued to come online and natural gas prices have been relatively low, incentivizing increased use of natural gas to generate electricity at the expense of other fuels.
