The EIA (U.S. Energy Information Administration) has predicted that natural gas production will decline in 2024, although the demand is rising to a record high. This information comes from the EIA’s recently released STEO (short-term energy outlook).

The Current Landscape

While there are many details and numbers behind this, it is important to understand the big picture first. The recent report highlights an unusual situation where supply and demand are diverging. The main cause of this is reduced drilling due to historically low natural gas prices.

Production Decline in 2024

U.S. natural gas production is expected to fall for the first time since the COVID-19 pandemic in 2020. The EIA predicts a decrease from a record 103.8 billion cubic feet per day (Bcf/d) in 2023 to 103.5 Bcf/d in 2024. Though this seems like a small change, it marks a shift for an industry that normally sees consistent growth.

Rise in Natural Gas Consumption

The EIA also projected domestic gas consumption would rise from a record 89.1 Bcf/d in 2023 to 90.1 Bcf/d in 2024 before easing back to 89.1 Bcf/d in 2025.

If accurate, 2024 could mark the first decline in output since 2020, when the pandemic reduced fuel demand, and the first four-year streak of rising demand since 2016.

LNG Surge, Coal Decline, and Fluctuating Emission Trends

The EIA also forecasts an increase in U.S. LNG exports from 11.9 bcfd in 2023 to 13.8 bcfd by 2025, while U.S. coal production is expected to fall to its lowest levels since the 1960s, with a shift towards gas and renewables.

CO2 emissions are projected to decrease slightly in 2024 due to reduced oil and coal usage but may rise again in 2025 with increased petroleum and coal use after reaching a low during the 2020 pandemic.