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The United States’ natural gas demand is currently growing at the fastest pace since the early 1970s, and demand growth has now supplanted supply growth as the cornerstone for the outlook of the U.S. natural gas industry over the next five years, according to a new CoBank research report.
The newly issued report titled “U.S. Natural Gas Outlook through 2020: Demand Is the New Captain of the Ship,” points out that the promise of low-cost, reliable natural gas supplies has spurred major investments by all end-users. As a result, the demand for U.S. natural gas will grow 25 percent over the next five years, with gas exports accounting for over half the growth.
A portion of the gas exported from the U.S. will be pipelined to Mexico, but most of it will be liquefied and then loaded onto tanker ships destined for overseas markets in Europe and Asia.
The report projects that the U.S. will become a net exporter of natural gas within the next two years, transforming the United States into a major supplier to the global energy markets.
Vast quantities of natural gas have been unleashed since 2008 thanks to advancements in hydraulic fracturing and horizontal drilling. The nation’s total dry natural gas production is projected to increase by 29 percent over the next five years, paralleling the growth in demand.
Even with the large projected growth in the nation’s demand and supply of natural gas, natural gas prices are expected to remain little changed from their current low levels – hovering well below $5 per MMBtu over the next five years.