The U.S. Energy Information Administration (EIA) revised its forecasts for U.S. natural gas production in 2023, expecting it to average more than 100 billion cubic feet per day for the first time.
EIA said growth in natural gas production has been limited in the Permian Basin of Texas and New Mexico because of pipeline constraints. EIA now forecasts that those constraints will be resolved more quickly than previously forecast.
EIA expects higher wholesale electricity prices this winter in every region of the country. According to EIA’s December Short-Term Energy Outlook (STEO), the increase in wholesale winter electricity prices ranges from 31 percent higher in the Southwest to more than 60 percent higher in the mid-Atlantic and Central regions.
“Although we expect that U.S. electricity customers will pay more for electricity, we do not expect retail electricity prices to increase as much wholesale prices this winter,” said EIA Administrator Joe DeCarolis.
EIA forecasts the U.S. residential electricity price this winter will average 14.5 cents per kilowatthour, a 6 percent increase from last winter.
New England could have wholesale electricity price peaks as high as $215 per megawatthour in January, which would be more than three times higher than peak rates elsewhere in the United States.
Limited natural gas pipeline capacity makes it likely that New England will need to import liquefied natural gas (LNG) or fuel oil to support electricity demand this winter. EIA expects significantly stronger global demand for LNG than average this winter, which contributes to its forecast of New England’s disproportionately large increases in wholesale electricity prices.
EIA expects a slight increase in crude oil production in Venezuela in the second half of 2023, following the United States’ ruling that Chevron can resume oil production there.
EIA expects significant growth in electricity generation from wind and solar power in Texas during 2023. Wind power will contribute 29 percent of the state’s electricity generation in 2023, up from 25 percent in 2022. The share of electricity generation from solar will reach 8 percent in 2023, up from 5 percent in 2022.