Best part of the article...
"Tumminello said 12,000 MW of coal plants were slated to retire in the region, to be replaced by 22,000 MW of gas-fired power generation"
US natural gas demand for power to double by 2040: ExxonMobil
Atlanta (Platts)--16Apr2013/332 pm EDT/1932 GMT
Natural gas demand for power generation in the US will increase by 90% to around 40 Bcf/d by 2040, an official with ExxonMobil said Tuesday.
The increase will be spurred by many factors, including the retirement of coal plants and the relatively low cost of natural gas, said Brian Sellers, manager of Americas business analytics for ExxonMobil Gas & Power Marketing Company. He made the comments at the LDC Gas Forums Southeast conference in Atlanta.
Other demand areas will also increase, including residential and commercial demand, but not as much as power demand, he added.
Power will account for half of the growth, representing 50% of overall natural gas demand by 2040, Sellers said.
By comparison, natural gas demand from the residential and commercial
sector will be about 22% of total demand by 2040 at about 18 Bcf/d.
Industrial demand will constitute about 26% of total natural gas demand by 2040, at about 21 Bcf/d, he said.
Sellers also said there is opportunity for demand growth in other sectors, including liquefied natural gas exports, and LNG as a replacement for diesel in the maritime industry.
On the same panel, Jeff Wallace, vice president of fuel services at Southern Company, said the use of natural gas to replace coal-based energy in power generation has been "huge and significant" for his company, which is the second-largest consumer of coal in the US.
In 2008, Southern burned about 78 million tons of coal compared to 42 million tons in 2012, he said.
Meanwhile, Southern used 200 Bcf of natural gas in 2008 compared to 588 Bcf in 2012.
"Our coal-based energy has dropped in half and our gas-based energy has tripled in a four-year period," he said.
The collapse in gas prices and the low electrical loads resulted in more than $1 billion in fuel savings for Southern's customers in 2012, he said.
In 2013, higher levels of gas burn and depressed coal burn continue, he added. As a result, coal inventories are extremely high. All coal plants are above target inventory levels and eight coal plants are within 95% of physical inventory limits, he said.
Wallace said the future fuel mix depended on many factors, including the price of natural gas. He predicted that by 2020, Southern's use of natural gas could be anywhere from 34% to 57%, while its use of coal could be between 22% and 45% of the total fuel mix.
The increased use of natural gas in power generation was a main theme at the conference.
Peter Tumminello, executive vice-president of wholesale services for AGL Resources and the keynote lunch speaker on Tuesday, said the increase in power demand for gas was going to be a "tremendous sea change" in the industry, especially in the Southeast.
Tumminello said 12,000 MW of coal plants were slated to retire in the region, to be replaced by 22,000 MW of gas-fired power generation.
"It's happened. It's happening and we believe it will continue to happen over time, where gas will be the fuel of choice for the power generation market here in the Southeast" he said.
Great article. Besides NG demand for power generation, other industries have started the conversion as well. Think about NUCOR and steel industry. They signed a $ 4-5 billion contract with Encana for steady supply of NG for their factories...Encana is drilling 4,000 wells...all in Piceance...and they are also active in drilling/testing Niobrara wells... No wonder WPX chracterized the Piceance basin as the "premier asset" of NG in the USA.