U.S. Power Sector Demand Led to Record High Natural Gas Consumption in 2023: EIA

U.S. natural gas consumption increased by one percent during 2023 to a new record yearly high of 89.4 billion cubic feet per day (Bcf/d), according to an Dec. 13 report published by the U.S. Energy Information Administration. U.S. natural gas consumption has continued to rise during the January to September 2024 period. The increase in natural gas consumption during 2023 can be attributed to an increase in the electric power sector, the largest natural gas consuming sector. U.S. consumption of natural gas for the electricity generation averaged 35.4 Bcf/d, or 40 percent, of U.S. natural gas utilized during 2023.

On the other hand, natural gas usage in the residential sector hit a five-year low and averaged 12.4 Bcf/d during 2023, down 8.9 percent from 2022. Meanwhile, natural gas consumption in the commercial sector declined 4.8 percent. Warmer than seasonal normal temperatures during summer 2023 led to higher natural gas consumption in the electric power sector to fulfill air conditioning demand.

U.S. natural gas consumption has been on an upward trend since 2018 and has increased on average by around four percent annually. Monthly natural gas usage set consecutive records from March 2023 through to November 2023. The increase in U.S. natural gas consumption can also be attributed to higher gas demand in the power sector, due to declining coal fired electric production capacity. U.S. coal assets are retiring as they become less efficient and expensive to run due to age and as coal-fired generators face higher competition from natural gas and renewables.

Natural gas usage peaks twice a year in the U.S., driven by the commercial and residential sectors during the winter and electric power sector during the summer. In winter, the most natural gas is consumed in January or February when demand for space heating increases. In summer, natural gas is used mostly in July or August to fulfil air-conditioning demand.

U.S. natural gas consumption from January to September 2024 averaged 89.8 Bcf/d, up one percent from the same period during 2023. The increase in usage can be attributed to a four percent increase in utilization in the electric power sector, which averaged 38.1 Bcf/d.