(New throughout, adds benchmarks, power use of gas and coal,
imports and exports)
Jan 10 The U.S. Energy Information
Administration on Tuesday reduced its forecast for dry natural
gas production in 2017 to 73.78 billion cubic feet per day, up
slightly from last year but shy of the previous month's forecast
of 74.80 bcfd.
That means dry gas production would fail for the second year
in a row to meet the record high of 74.14 bcfd produced on
average in 2015, according to the EIA's Short Term Energy
Outlook (STEO) in January.
Dry gas output in 2016 averaged 72.36 bcfd as low energy
prices reduced drilling activity. It was the first annual
production decline since 2005.
EIA projected dry gas production would rebound in 2018 to a
record high of 76.62 bcfd.
The EIA also cut its forecast U.S. gas consumption to 75.37
bcfd in 2017 from the December forecast of 75.96 bcfd.
That would still top the 2016 record high for gas demand of
75.07 bcfd and would be the eighth annual record in a row.
EIA forecast gas demand in 2018 would rise to a new all-time
high of 76.85 bcfd.
EIA said the United States became a net exporter of gas for
the month of November 2016 as sales of liquefied natural gas and
pipeline flows to Mexico increased, while imports from Canada
eased. It said the next month that will happen will be in
But on an annualized basis, the United States was not
expected to become a net exporter of gas until 2018, according
to federal data. The United States was last a full-year net
exporter of gas in 1957.
EIA projected coal would retake its long standing lead as
the primary fuel for power generators in 2017 with gas prices
expected to increase by about 40 percent. Coal lost its title to
gas in 2016 when gas prices dropped to their lowest since 1999.
EIA projected coal's share of generation will rise to 32.5
percent in 2017 from 30.4 percent in 2016. Prior to 2016, coal
had been the primary fuel for U.S. power plants for the last
EIA projected coal will again lose its crown to gas in 2018
as gas production increases while generators retire more coal
plants for environmental and economic reasons.
EIA projected gas' share of power generation would rise to
32.8 percent in 2018 from 32.3 percent in 2017, still below 34
percent in 2016. Coal's share of generation will decline to 31.6
percent in 2018.
(Reporting by Scott DiSavino; Editing by Marguerita Choy and