U.S. liquefied natural gas (LNG) exports are expected to drop 6 percent to 10.5 billion cubic feet per day during the second half of 2022 from the first half of the year, forecast from the U.S. Energy Information Administration (EIA) said.
EIA revised its estimates based on an outage at the Freeport LNG facility, which is expected to last until late 2022. Freeport accounts for 17 percent of U.S. LNG export capacity.
“With less LNG being exported in the second half of the year, more natural gas is likely to stay in the domestic market,” said EIA Administrator Joe DeCarolis. “We expect lower U.S. natural gas prices for the rest of 2022 than we had previously forecast, but lower prices in 2022 led us to reduce our expectations for natural gas production.”
EIA forecasts the U.S. Henry Hub spot price will average $5.97 per million British thermal units (MMBtu) during the second half of 2022, down 44 percent from the June forecast. For the last three quarters of 2023, EIA expects natural gas prices will average $4.36/MMBtu, up 14 percent from the June forecast. EIA also expects that more natural gas will be in storage heading into this winter than it had forecast in June.
Other key takeaways from the July 2022 STEO forecast include:
EIA expects U.S. refineries to run at an average of 94 percent of their capacity during the third quarter of 2022, a higher capacity factor than in previous years. At the same time, refinery capacity in the United States has decreased since 2019.
Coal consumption will decrease by 3 percent in 2022 and by 4 percent in 2023, as 24 gigawatts of coal-fired power plants retire by the end of 2023.
Renewable energy will provide 24 percent of U.S. electricity generation in 2023, up from 20 percent in 2021. The growth in generation from renewables is primarily driven by solar power, with 71 percent more capacity by the end of 2023 than at the end of 2021. EIA expects solar generation by U.S. power plants to grow by 27 percent in 2022 and by 26 percent in 2023.