COVID-19 pandemic contributed to a decrease in energy consumption in 2020.
Washington–Marketed production of natural gas decreased slightly in the United States in 2020 but remained near the previous year’s record-high levels, according to a Cornerstone Research report released today. U.S. physical trading activity rose for the sixth straight year.
The report, Characteristics of U.S. Natural Gas Transactions: Insights from FERC Form 552 Submissions as of July 1, 2021, found that annual marketed production fell 1% in 2020, to 41,309 tBtu, compared to the previous year. At the same time, physical trading activity reported by 670 respondents rose 2.7% in 2020 to 157,368 tBtu.
The COVID-19 pandemic contributed to an estimated 10% contraction of all U.S. domestic energy consumption in 2020, and a 2% decrease in natural gas usage. In the second quarter of 2020, natural gas prices plummeted to decade lows across all major gas-consuming regions. The average annual Henry Hub price dropped 21% in 2020, to its lowest level in more than
“Marketed production of natural gas in 2020 remained near the record-high levels reached in 2019 despite COVID-19’s impact,” said Nicole Moran, a Cornerstone Research principal and report coauthor. “The latest net export growth projections for the 2019–2022 period have surpassed pre-pandemic forecasts.”
Index-priced transactions comprised around 83% of all Form 552 transactions, an increase of 16 percentage points since 2008. For the sixth straight year, companies that chose not to report fixed-price volume to the indices (62%) comprised a larger share of fixed-price volume than reporting companies (38%).
“The U.S. exported more than 2,410 billion cubic feet of LNG in 2020, up 31% from 2019” said Greg Leonard, a Cornerstone Research senior vice president and report coauthor. “In late 2020, high LNG prices in Asia and Europe relative to Henry Hub increased opportunities for interregional trade.”
The growth of U.S. LNG exports was supported by higher U.S. natural gas surplus, driven by decreased domestic consumption and a continued increase in LNG export terminal capacity. About half of U.S. LNG exports went to five countries in 2020: China, South Korea, Japan, Spain, and the United Kingdom.