Meeting Future Natural Gas Needs

Natural gas demand growing

The nation's consumption of natural gas will increase by more than 40 percent between now and 2025, according to the U.S. Energy Information Administration (EIA). Demand will grow because natural gas is a versatile and clean fuel. It heats and cools homes, provides fuel for cooking, generates electricity and serves as the raw material to make products as divers as clothing, contact lenses, computers, medicine and fertilizer.

Today, natural gas supplies 23 percent of U.S. energy. In 2004, it generated almost 24 percent of electric power, supplying heat and cooling to more than 60 million households, and providing almost 38 percent of all primary energy for industrial operations and 13 percent of the energy for commercial facilities.

In 2004, domestic production of natural gas was 18.8 trillion cubic feet (Tcf). That same year, demand for natural gas totaled 22.4 Tcf. The difference was made up primarily with Canadian natural gas - 16% of the natural gas used in America. Imports of liquefied natural gas (LNG) now provide about one percent of the nation's natural gas and will increase in the future (to 18 percent by 2020, according to EIA).

One Tcf of natural gas will heat 1 million homes for 15 years

The recent tightening of the natural gas supply and demand balance places greater urgency on addressing the future of this important energy source. Conflicting policies that encourage natural gas use, but discourage developing new supplies, must be addressed. Continuation of such policies has been called "a recipe for problems" by Congress' Joint Economic Committee.

Supplies adequate but must be developed

A multi-pronged approach is essential for meeting future U.S. natural gas demand: (1) wiser energy use and conservation, where possible; 2) development of more U.S. supplies - both offshore and in the Mountain West; (3) construction of pipelines to bring Arctic gas to consumers; and (4) tapping into global markets through LNG from a diverse array of suppliers.

The United States, which produces about 83 percent of the gas it consumes, has large amounts of undeveloped natural gas off its coasts, in Alaska and in the Mountain West. US natural gas resources are abundant - estimated at 1,450 trillion cubic feet. That is enough gas, based on today's technology, to meet current US demand for more than 60 years.

Increasing U.S. natural gas development

As industrial and residential natural gas users are learning, constraints on natural gas supply have contributed to higher prices and greater price volatility. Industry and government must work together to ensure supplies of this versatile, clean-burning fuel are available to keep our economy growing.

The key to more U.S. natural gas development is access to non-park, non-wilderness federal lands with vast natural gas resources. Policymakers should remove restrictions on access to these lands so that responsible development can produce new supplies of clean-burning natural gas. Permitting and administrative procedures should be streamlined and coordinated to avoid unnecessary barriers and/or delays to development.

The United States will need to develop new natural gas supplies to offset declining production from older producing natural gas fields. We must start work immediately to gain access to new resources under federal lands, developing unconventional gas (such as coalbed natural gas), building pipelines to bring Arctic gas to consumers, and building facilities to increase supplies of LNG.