RBN Energy,
which was recently acquired by NOVI Labs, recently analyzed and forecasted
natural gas demand growth in the U.S. Northeast. Over the past decade and a
half, as Appalachian shale gas production skyrocketed, much of that natural gas
in the Northeast has been produced for transport to other U.S. regions since it
could easily meet regional demand. More natural gas power plants have been
built in the region, replacing coal plants, improving air quality, and reducing
carbon emissions. However, with growing demand, particularly in the power
sector, that is changing, as local and regional demand begins to grow faster.
RBN classifies fourteen states as far south as Virginia and as far west as
Ohio, as northeastern states.
Below is a graph showing the
four sectors where natural gas is used: residential, commercial, industrial,
and power. Three of the four have remained steady for years or have had small
increases, but the power sector has doubled its natural gas consumption over
the past decade. One big reason for the rise is gas replacing coal. However, as
RBN author John Abeln notes, as coal retirements have slowed down, natural gas
demand has continued to rise. New demand from AI data centers is one
reason.
The graph below shows the
seasonal profiles for daily energy output for natural gas, solar, and wind over
the past five and a half years. Three obvious conclusions are that solar output
is highest in summer, wind output is highest in winter, and natural gas output
is highest in summer but can also be high in winter. Solar generation peaks in
June and July at around 136% of the annual average, while December is the low
point, with just 54% of the annual average. Wind peaks in November and December
and is lowest in June and July, almost the reverse of solar. That makes wind
and solar seasonally complementary in general. Natural gas typically fills the
seasonal shortfalls of solar and wind output. Natural gas output peaks in July
and August and is at its lowest in April.
RBN used EIA Form 860M to do
initial calculations for forecasting natural gas demand growth over the next
five years. However, they note that using that alone is quite incomplete, and
they have developed their own formula for predicting demand growth by
analyzing the probability of a project coming into service based on its
current stage of development.
“The EIA data and our analysis indicate that Northeast
capacity growth will be strongest in the solar sector, with smaller growth in
wind capacity and a decline in coal capacity. Gas-fired generation capacity is
expected to be the same five years from now after adjusting for project
likelihood. However, we anticipate an increase in the utilization of that
capacity as changes in the market require more baseload power from gas plants.
Therefore, we forecast a 230-MMcf/d increase in gas-for-power consumption over
the next five years — based only on the EIA data, that is.”
“The 230-MMcf/d increase is dramatically smaller than
the rate of increase seen over the past five years. But this analysis only
looks at new power generation reported in Form 860M. We at RBN have identified
six projects under development in the Northeast that are not on this EIA list
and have the potential to have a much larger impact on regional gas demand.”
Those six projects that they
identified are shown on the map below.
Below, they analyze those
projects and plug them into their formula to derive 1BCF of possible new demand
over the next five years. However, they also caution that some of those
projects are likely to be slower to come online than predicted and that big
changes in the bigger ones, such as a cancellation, could change the numbers
significantly.
“If we assume 90% utilization of these facilities and
use our standard conversion rate (where 1 TWh is equal to 7.15 MMcf/d) then
these projects would increase Northeast gas demand by 1 Bcf/d by 2029, which
dwarfs the 230-MMcf/d increase based on our analysis of EIA 860M. As shown in
Figure 4 below, most of the increase from our suggested six-plant buildout is
in Pennsylvania (blue layer) but with a substantial portion in West Virginia
(red layer) and smaller amounts in two other states. This 1 Bcf/d assumes that
all of the projects come online on schedule, which is unlikely. Also note that
more than 60% of new capacity comes from just two projects, which makes
prospects for increased gas usage in the Northeast highly dependent on the
decisions of a few companies.”
As they note below, the
forecasted increase, even at the high end, is just 13%, compared to the 20%
growth in demand in the past five years. They also note that Marcellus and
Utica producers could easily meet that demand increase with more rigs, but for
a real drilling boom, they would still need more pipeline takeaway capacity out
of the region. They suggest that several BCF per day of new takeaway capacity
would be needed. They also note that there are new pipeline projects planned to
come out of the region, and they plan to write about them in future posts.
“The roughly 1.2 Bcf/d in incremental in-region power
demand that constitutes the high end of our expectations over the next five
years — 230 MMcf/d from our assessment of the EIA list and 1 Bcf/d from the six
other projects — represents a 13% increase from the 9.2 Bcf/d of the
power-related gas demand in 2025 (see orange layer in Figure 1). That’s
noteworthy, but even a full jump of 1.2 Bcf/d by 2030 would be smaller than the
20% increase we saw over the past five years.”
References:
Who
Says You Can’t Go Home – How Much Gas Demand Growth Will Come from Within the
Northeast? John Abeln. RBN Energy. May 29, 2026. Who
Says You Can’t Go Home – How Much Gas Demand Growth Will Come from Within the
Northeast? | RBN Energy
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