According to the early release of the Energy Information Administration’s (EIA) Annual Energy Outlook (AEO), natural gas demand is slated to grow 16.2 percent, increasing from 20.4 percent Tcf in 2007 to 23.7 Tcf by the year 2030. EIA projects the greatest increase in natural gas demand in the next 25 years will be for electricity generation. AGA believes that if climate change legislation is enacted, natural gas will play a prominent role in reducing carbon emissions and gas demand will be substantially higher.
Increased use of natural gas will result in significant benefits, including a stronger U.S. economy, a cleaner environment, and less dependence on foreign resources. However, AGA believes that the most efficient and best way to use natural gas is direct use—that is, it is more efficient to use gas to fuel home heating systems than it is to burn gas to generate electricity.
Additionally, AGA believes that greater fuel diversity for power generation should be encouraged, and that energy efficiency technologies and measures should be supported. To the extent energy efficiency reduces gas consumption, and in turn has an adverse effect on a utility's earned return, regulators should look favorably on natural gas utility proposals for rate structures that will align the interest of customers and the utility behind energy efficiency.
Additional Information: Annual Energy Outlook 2009 Early Release (U.S. Energy Information Administration, December 2008; www.eia.doe.gov); Greenhouse Gas Initiatives Analysis Using the National Energy Modeling System, (Natural Gas Council, Oct. 2007, www.ngsa.org), Natural Gas Outlook to 2020: The U.S. Natural Gas Market—Outlook and Options for the Future (American Gas Foundation, February 2005; www.gasfoundation.org); Fueling the Future: Natural Gas and New Technologies for a Cleaner 21st Century (AGA, February 2000; www.aga.org); Balancing Natural Gas Policy-Fueling the Demands of a Growing Economy (National Petroleum Council, October 2003; www.npc.org)
AGA Contact: Bruce McDowell, Director Policy Analysis,(202) 824-7131