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US Natgas Demand Expected to Hit Record High After Holiday Weekend Freeze – Energy News, Top Headlines, Commentaries, Features & Events

  • January 19, 2025
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Those events were caused in part by a drop in fuel supplies from freezing oil and gas infrastructure, also known as freeze-offs. This forced some power grid operators

US Natgas Demand Expected to Hit Record High After Holiday Weekend Freeze – Energy News, Top Headlines, Commentaries, Features & Events


Those events were caused in part by a drop in fuel supplies from freezing oil and gas infrastructure, also known as freeze-offs. This forced some power grid operators and utilities to impose rotating outages due to a lack of fuel. The Electric Reliability Council of Texas (ERCOT), which operates the power grid for most of the state, issued a weather watch for Jan. 20-23 due to extreme cold that will boost demand and potentially lower reserves. ERCOT, however, said it expects normal grid conditions during a weather watch.

PJM Interconnection, the nation’s biggest power grid that oversees all or parts of 13 states from Illinois to New Jersey, issued a cold weather alert for Jan. 20-22. The PJM alert asked power generation and transmission owners to prepare to call in additional staff and, if needed, defer or reschedule planned maintenance.

“Generation owners must take extra care to maintain equipment so that it does not freeze in the cold,” PJM told Reuters in an email, noting it was possible the grid could reach a new record demand peak for the winter.

During a December 2022 winter storm, dozens of power plants in PJM and elsewhere were unable to operate for various reasons, including a lack of fuel after gas supplies were curtailed due to freezing wells and pipes. Power plant owners that failed to deliver electricity to PJM when requested during that 2022 storm agreed to pay $1.2 billion to settle the grid’s non-performance penalties.

Gas provides about 43% of the nation’s power generation and heats about 45% of the country’s homes, according to data from the U.S. Energy Information Administration (EIA). The expected jump in demand, coupled with a potential drop in supplies, could drive up power and gas prices next week.

BY THE NUMBERS

Financial firm LSEG said average gas output in the Lower 48 U.S. states fell from 104.2 billion cubic feet per day (bcfd) in December to 103.4 bcfd so far in January due mostly to freeze-offs.

Curtailments have been small so far, but analysts noted that freeze-offs could soar in coming days.

“As peak cold intensifies, it would not be surprising to see production freeze-offs reach 20 bcfd,” analysts at energy consulting firm EBW Analytics said in a note this week. In the February 2021 storm that hit Texas and other states, freeze-offs cut gas supply by up to 20.4 bcfd over roughly a week, according to LSEG data.

LSEG forecast total gas use, including exports, could soar to 167.2 bcfd on Jan. 20 and 169.3 bcfd on Jan. 21. If that happens, demand on Jan. 21 would top the current daily record high of 168.4 bcfd, hit on Jan. 16, 2024.

One billion cubic feet of gas could supply about five million U.S. homes for a day. Adding to total gas demand, the amount of fuel flowing to the eight U.S. liquefied natural gas (LNG) export plants was on track to reach 15.8 bcfd on Friday, which would top the current daily record high of 15.5 bcfd on Jan. 11.



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