The Department of Energy’s Energy Information Administration short-term energy outlooks expects total natural gas use to rise slightly from 2010 levels to 66.7 billion cubic feet per day (Bcf/d) in 2011, largely the result of increased use in the industrial sector. Forecast industrial consumption rises 3.6 percent to 18.7 Bcf/d in 2011.

Total consumption growth increases by 0.7 percent in 2012 to 67.2 BCF/d. Natural gas use in the industrial and electric power sectors grow by 1.3 percent and 2.9 percent, respectively, offsetting forecast declines in residential and commercial consumption.

EIA said it expects the growth in natural gas production to slow from the 2.6 Bcf/d (4.5 percent) increase seen in 2010. Total marketed production is expected to grow 1.5 Bcf/d (2.4 percent) to 63.3 Bcf/d in 2011 and 0.5 Bcf/d (0.8 percent) in 2012.

The Henry Hub spot price averaged $3.97 per MMBtu in March. That was 12 cents lower than the average price in February. EIA said it expects the price will average $4.10 per MMBtu over 2011, a decline of 29 cents from 2010. However, the price for 2012 is forecasted to be $4.55 per MMBtu.

Electric Consumption

The EIA said it expects the U.S. to use 0.2 percent more electricity in 2011. Improved economic conditions are expected to spur growth in electricity sales to the commercial and industrial sectors by 1 percent and 2.5 percent, respectively. During 2012, U.S. electricity consumption should grow by 2.3 percent.

The electric power sector is expected to generate slightly less electricity in 2011 compared to 2010. Higher-than-normal precipitation in the Pacific Northwest has led to an increase in hydroelectric generation, which is expected to increase by 7.3 percent in 2011. Increases in other renewable energy sources, especially a 19 percent increase in wind generation, are offset by declines in coal-fired generation, expected to be down 1.8 percent in 2011, and nuclear, forecast to decline 1.6 percent. In 2012, EIA expects a 2.5 percent increase in total electric power generation, primarily through an increase in coal and natural gas generation.

Coal Consumption

The electric power sector used 5 percent more coal in 2010, primarily due to an increase in electricity generation during the summer. EIA said 2011 could bring a slight decrease in coal consumption and forecast a 3 percent increase in 2012.

Coal production in 2010 rose 1 percent in the face of a 5 percent increase in total U.S. coal usage. Existing coal stocks were used to meet demand. EIA projects that coal production will increase slightly in 2011 while coal consumption will show little change, followed by a 2.3 percent increase in 2012.

Carbon Emissions

EIA estimates that fossil fuel-based carbon dioxide (CO2) emissions increased by 3.7 percent in 2010 as a result of increased use of both fuels for electricity generation. The forecast for fossil fuel-based CO2 emissions remain relatively flat in 2011. Expected increases in electricity generation and the continued economic improvement in 2012 contribute to a 1.8 percent increase in CO2 emissions from fossil fuels.

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