U.S. Gas Production: Can We Trust the Projections?

 

Government (EIA) forecasts suffer in credibility when compared with geologic assessments.

In recent years, many have promoted natural gas as the "clean and safe" alternative to coal or nuclear energy in electrical power generation. This emphasis on natural gas should focus attention on the long-term forecasts of U.S. production and consumption of natural gas, as published by the Energy Information Administration (EIA) in the Annual Energy Outlook. In particular, what confidence should be placed in these projections?

First, consider gas consumption. The EIA predicts that U.S. natural gas consumption will increase by 62 percent from 1999 to 2020, while use of petroleum and coal will rise by 33 percent and 22 percent, respectively, over the same period. The predicted gas upsurge will occur primarily as a result of construction and operation of a large number of new base-load gas-fired electricity generation plants.

Second, consider gas production. The EIA predicts U.S. natural gas production will increase by 56 percent from 1999 to 2020, while coal production will increase by 17 percent over the same period, and oil will decline by 2 percent by 2020. () Now compare those predictions with past experience. As shown in Figure 1, U.S. marketed gas production reached a maximum of 22.65 trillion cubic feet (Tcf) per year in 1973 - a record that still stands after more than a quarter century of upheavals in gas markets.¹ This fact should provide a context for the EIA forecast.