Natural gas use for power generation is up

Boston, Mass., July 25, 2002 — Through July 13, year-to-date power generation is 1.8% above the same period in 2001, while summer power generation is up 4.9%, Energy Security Analysis (ESAI) reports.

Assuming that the additional generation is gas-fired (a safe assumption for most of the incremental power this season), and that regional heat rates similar to 2001 prevailed this year, ESAI, in the latest North American Natural Gas Stockwatch, believes the added generation would imply that gas demand has increased by 4.7 Bcf/d nationwide.

According to ESAI, demand from EEI’s Central Industrial, Mid-Atlantic, West Central, and Southeast is driving this large year-on-year increase. “Regionally, the additional electrical demand would suggest that gas consumption has increased by about 1 Bcf/d in these EEI regions,” says Mary Menino, Senior Analyst at ESAI, “In contrast, pressure on gas deliveries to California has been relatively modest due presumably to electric demand management measures.”

ESAI notes that although the direct translation of additional electrical output in California into natural gas suggests about 180 MMcf/d, the availability of more hydro capacity in the Northwest has likely reduced that estimate.

ESAI believes this added gas demand for power generation has not been a more bullish force in the gas market due to gas production keeping pace, industrial demand remaining down, and the efficient use of stored gas.

Since its inception in 1984, Energy Security Analysis (ESAI) has been dedicated to monitoring, analyzing, and synthesizing information about worldwide energy markets.

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