Energize Weekly, March 14, 2018
U.S. industry will be running on natural gas—consuming it as a fuel and a feedstock—and using more of it than any other sector through 2050, according to a forecast by the federal Energy Information Administration (EIA).
The EIA expects the industrial sector’s consumption to rise 40 percent to 13.7 quadrillion British thermal units (BTUs) in 2050 from 9.8 quadrillion BTUs in 2017. By 2020, industrial consumption is set to surpass its previous 1970 record.
The projects are based on EIA’s “reference case,” which assumes the trends in technological improvements, demographics and economics continue. It also assumes that current laws and regulations affecting the energy sector are unchanged.
In 2017, the industrial sector surpassed electric power utilities as the prime consumer of natural gas. Industry had already surpassed residential and commercial sectors combined in 2010.
Two-thirds of the total industrial natural gas consumed in 2017 was for heat or power applications—either for industrial processes, such as in furnaces, or onsite electricity generation.
Food, glass, bulk chemicals and metal-based durables factories used natural gas to cover 40 percent more of their heat or power applications in 2017. EIA said these industries will continue to use about the same proportion of natural gas for heat or power through 2050 because the cost associated with fuel switching can be significant.
The bulk chemical industry was the single largest industrial consumer of natural gas in 2017, using 3.1 quadrillion BTUs. The bulk chemical industry includes the manufacture of organic chemicals, such as petrochemicals, as well as inorganic chemicals, resins and agricultural chemicals.
In the EIA reference case, bulk chemical’s consumption of natural gas increases 51 percent through 2050, compared to a 40 percent growth rate for industrial consumption overall. Most of the gas will be used for heat and power, about 25 percent will go to feedstocks for agricultural chemicals, primarily fertilizers, and for methanol production.
Natural gas feedstock is only used for agricultural chemicals and methanol, while hydrocarbon gas liquids (HGL) are also used as feedstock for many basic organic chemicals such as ethylene and propylene, which are used in the production of plastics.
Most HGL production is recovered at natural gas processing plants from raw natural gas streams with high proportions of hydrocarbons other than methane. The EIA projections show most of the HGL production through 2050 will come from natural gas produced in the Appalachian and Permian basins.
The EIA outlook also projects a growth in natural gas for electricity generation of 75 percent through 2050 to more than 35 quadrillion BTUs.
