Document Ked402G5pxrZnRLGxjrNvNOr
What's going on in natural gas markets?
August 13, 2024
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American
Petroleum Institute
Sierra Club v. Dept of Energy, 4:25-cv-5027
Document 110 - Attachment 1 SC_EVERSPLIT0019999
In the U.S., natural gas use is at record highs
Majority of sectors at record highs Facilitated by status as #1 gas producer
U.S. natural gas consumption
120 BCFD 110 100
90 80 70
:~ 1111111111
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+71%
I
IDemand by sector - 20231
BCFD
1
Source: U.S. EIA
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SC_EVERSPLIT0020000
Prices have fallen sharply since 2022 peak
Henry Hub prices
$10 /MMBTU
$10/ MMBTU
$8
$6
$4
$2/MMBTU $2
$0
Jan-19
Jul-19
Source: Bloomberg
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
Jan-24
Jul-24
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Production hits record, pulls back slightly
U.S. dry natural gas production
110 BCFD
2022 2023 2024
80
1-Jan
1-Feb 1-Mar
1-Apr
1-May
1-Jun
Source: Bloomberg
1-Jul
1-Aug
1-Sep
1-0ct
1-Nov 1-Dec
Sierra Club v. Dept of Energy, 4:25-cv-5027
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El Niiio contributes to very warm winter
ean emperature epartures rom verage
December 2023-February 2024
Average Period: 1901-2000 NOAA'sNalKNI Cenlers roi Enwcnmental lnlormatJon - - -
- 10 -a
--6
--4
-2
0
2
Wed MM06202
So.iu nCtmG~
rees Fahrenheit
......
6
8
10
Sierra Club v. Dept of Energy, 4:25-cv-5027
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SC_EVERSPLIT0020003
Power burn continues to set records
Power sector natural gas consumption
60 BCFD
50
40
30
20
10
0
Jan-18
Jan-19
Source: Bloomberg
Jan-20
Jan-21
Jan-22
Jan-23
Jan-24
Sierra Club v. Dept of Energy, 4:25-cv-5027
Power burn is up 22% since 2018
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Accordingly, storage levels are robust
Working gas in underground storage compared with the 5-year maximum and minimum
billion cubic feet
4,400
4,000
3,600
3,200
2,800 2.400 2,000 1.600 1,200
800 400
0
Jul -22
Oct-22
Jan-23
Apr -2 3
, , , , , , , , , , , $ , , , , , ,
Jul-23
I I I I I
II,__ _____ .,,,,,I
Key winter period
Oct-23 Jan-24 Apr-24
,, , , : ,
., . .
Jul-24
5-year maximum - nirirrum range - Lower48 - 5--year average
Data source: U.S. Energy lnfonnatIon Admm1strat1on
Sierra Club v. Dept of Energy, 4:25-cv-5027
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SC_EVERSPLIT0020005
Significant infrastructure challenges exist
Canceled & delayed pipelines in Appalachia
Canceled
6,. Delayed
Appalachian natural gas production
35 [
30
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20
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10
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Source: U.S. Energy Information Administration
Sierra Club v. Dept of Energy, 4:25-cv-5027
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SC_EVERSPLIT0020006
Load growth has dominated the news cycle
I!) UTILITY DIVE
US electricity load growth forecast jumps 81% led by data centers, industry: Grid Strategies
POWER
AWS Acquiring Data Center Campus Powered by Nuclear Energy
RTO~
lnsider LLC
Grid Planners Predict Sharp Increase in Load Growth
Sierra Club v. Dept of Energy, 4:25-cv-5027
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SC_EVERSPLIT0020007
Load growth has slowed in recent decades...
U.S. electricity consumption
4,500 TWh 4,000 3,500 3,000 2,500 2,000 1,500 1,000
so: 111111111111111111
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Source: AP/ using EIA data
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...but amid fast-growing Al and re-shoring...
Manufacturing Facilities Announced Since 2021
.. i
Semiconductors Clean Energy Manufacturing Batteries/ EVs
Source: The White House
Biomanufact uring Heavy Industry
Existing & Announced Data Centers
G
ERCOT f
,~.
Sources: S&P Global Markel Intell, ence; 451 Research; S&PGlobal Commod,t Ins, his
Source: S&P Global
Electrification & hydrogen production also driving growth.
Sierra Club v. Dept of Energy, 4:25-cv-5027
Oatacenter st at us
Etim,,1<1d ~t, t.Y _ , o.<ll!Od MW)
<a=:
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...load growth forecasts are surging
~
+39% I +1.5 GW
Peak Load Growth Forecasts for 2030
-NYISO
+16% I +3.7 GW
-ISO-NE
+28% I +5 GW
Summer peak Winter peak
-Colorado
+13% 11.3 GW
-SRP
+38% I +3 GW
-AEP Ohio
+100% I +4.4 GW
ERCOT
- +93% I +80 GW
Source: Respective utility & grid operator forecasts.
Sierra Club v. Dept of Energy, 4:25-cv-5027
-PJ-M
+14% I +21 GW
~
+17% I +5.5 GW
G p
+40% I +7 GW
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Key takeaways
Load growth is under-appreciated and could represent the biggest paradigm shift since tracking.
Gas-fired power plants are likely the most realistic option to meet strong load growth, especially from data centers.
Rapidly rising electricity demand may make climate goals more difficult to achieve.
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