Massive shale-driven production growth in the U.S. Northeast and soaring demand from the Southeast will turn the nation's traditional south-to-north and west-to-east pipeline natural gas flows and price spreads upside down, according to Bentek Energy®, the natural gas and oil analytics unit of Platts, a leading global energy and commodities information provider.
"Based on our latest modeling, the U.S. is embarking on a true sea change," said Rocco Canonica, Bentek Energy director of energy analysis and lead author of the just-released 10-year outlook report Son of a Beast -- Utica Triggers Regional Role Reversal. "The Northeast is poised to switch from the nation's largest demand region to a net supply region, and the U.S. Southeast is racing to become a much larger net demand region after being a major supplier to the U.S. gas market."
The 114-page report released at Houston Platts Commodity Week, an annual energy and biofuels outlook event, says that more than one-third of the U.S. natural gas production increase from 2013 to 2023 -- or 9.1 billion cubic feet per day (Bcf/d) -- is expected to come from the Utica and Marcellus shale formations in the northeastern U.S., while nearly half of U.S. demand growth, or 9.4 Bcf/d, is expected to occur in the Southeast over the same period.
Bentek forecasts a 9% rise in natural gas prices by late decade at Henry Hub, a key North American hub and pricing reference.
Additional takeaways from the report include among others:
-- Natural gas flows to the Northeast from other regions to plummet; net Northeast outflows to total 2.8 Bcf/d by 2023
-- The liquids-rich shale plays of Texas and the Midcontinent to contribute about 44% of the expected U.S. natural gas supply growth over the next 10 years
-- Total U.S. natural gas demand to rise 27% over the next decade, while U.S. supply to climb nearly 38%
-- Substantial reconfiguration and repurposing of the U.S. natural gas pipeline grid
That's just dumb...Exports start in 2016.. Electric producers are switching as we speak and a huge number of coal plants will closing by 2016 also... They are converting nat gas into many uses' including diesel fuel 2 new plants will open around that time too... 2016 will be a good year to own some gas...
I'm sure Bentek has taken all that into account in their model. Bentek are the premier gas flow modelling company in the country. They have a lot more information at their disposal than people on this message board.
P.S. The amount of NG exports will not be sufficient to make a significant impact on the domestic price.
This report is suspect...
Marcellus is already at 9.1 Bcf/d as of June 1 and expected to go to 11.4 by end of year and to 14.7 by end of next year. Aggregate US nat gas withdraws/production is still flat at best for the last 12 months even with such contribution from Marcellus. Looks like treadmill to me, more wells have to come on line just to make up for depletion rates.
I take these with a grain of salt.
I recall a similiar report last year. Bentek said 3.60 and then GS came out with their 4.50 and as most were short we got clobbered. those were the days when we said every day why is gas going up everyday with no news. anyone remember that history?
The only issue I have with these reports, is they don't include LNG exports, Mexico`s higher demand of NG from U.S, the fleet of Semi`s converting to NG over Diesel fuel, NG cars, and more power plants converting to NG, I do believe in the fluctuation of NG prices, lower prices in spring summer and fall but higher prices in winter, the supply and demand theory when NG is needed the most will always be more costly, its no different then oil, we see oil tank from Christmas to early spring then goes up in price for summer driving demand.
Mexico just recently discovered there own super large N-gas Fields so they will surely begin producing them in a couple of years.
I Also I still say by the time LNG terminals are ready there will be plenty of Fracking going on over seas to compete with our LNG.
Just my thoughts.
I still enjoy your posts.
I'm sure Bentek is aware of LNG export plans.
First significant exports are still years off, secondly they presumably see the level of exports are insufficient to offset continued robust production growth.