Monday, April 18, 2016

Keep Your Eyes Trained on the Horizon

I always try to keep the big picture in mind, even when things look dark, and one of the important driving factors for increased natural gas consumption is the addition of gas-fired power generation.  The EIA expects 2016 to be the first year that gas drives more electrical power than coal.  Think about it - what an incredible transition in less than ten years.  That trend will continue as older coal plants are retired and new gas generation is added.

The EIA published the map below last week showing 18.7 gigawatts of natural gas generation expected to be added between 2016 and 2018.  As one might expect, the largest additions are places with proximity to gas (i.e. the Marcellus region in the northeast and Texas and Louisiana near the Haynesville).  Also encouraging is the capacity additions in population growth areas of California and Florida that are not close to the shale boom.

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