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After the Polar Vortex: Recalibrating Key Natural Gas Supply, Demand and Market Issues

This article discusses the impact of the Polar Vortex on natural gas supply and demand, highlighting record consumption levels and the need for recalibration. It also provides insights into peak day supply, consumption by sector, and short-term expectations.

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After the Polar Vortex: Recalibrating Key Natural Gas Supply, Demand and Market Issues

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  1. April 4, 2014 After the Polar Vortex: Recalibrating Key Natural Gas Supply, Demand and Market Issues AGA Communications Committee Bringing it Home

  2. 2013-2014 Winter Heating Season • Cold everywhere east of the Rockies Front; Cold for sustained periods; Cold in areas that consume large volumes of winter weather-induced gas supply • January 2014 – Highest natural gas consumption month on record at 3.2 Tcf with highest consumption day (139 bcf) on January 7th – a strong consumption day had been more recently about 110 Bcf • January 2014 – Highest daily average natural gas to power generation on record for a winter heating season month (21.4 Bcf/d) and highest peak day demand for power gen during winter heating season on January 7th (31 Bcf) • January 2014 – largest net withdrawal of working gas for a month at more than 950 Bcf, surpassing previous record of 847 Bcf set in January 2003

  3. Peak Day Natural Gas Supply and Disposition – January 7, 2014 Peak Day Avg. 2008/2010/20121/7/14% Domestic Natural Gas Supply (Bcf/d) Dry Gas Production 52.1 61.9* +19 Canada Imports (Net) 9.1 7.7 -15 LNG Imports 2.4 1.0 -58 Underground Storage (Net) 41.9 68.1 +63 Consumption by End-Use Sector (Bcf/d) Residential/Commercial 55.9 78.4** +40 Industrial 19.9 24.0 +21 Electric Power 25.2 31.2 +24 Mexico Exports 1.0 1.8 +80 Pipeline/Transportation 2.6 3.6 +39 Total 104.6 139.0** +33 *Well freeze-offs in Eastern US and Mid-Continent reduced daily production about 4 Bcf/d. Production essentially recovered in one week. **Record consumption volume. Source: Bentek Energy, LLC.

  4. North American gas demand (Bcfd) Source: Bloomberg New Energy Finance

  5. Base case – North American production outlook by area Dry gas production (Bcfd) Rig count, select areas Source: Bloomberg New Energy Finance Note: Rig count should not be viewed as comprehensive as we do not model every play.

  6. Natural Gas Production

  7. Unconventional Natural Gas Production in North America

  8. U.S. Natural Gas Consumption and Reserves(trillion cubic feet) Source: Energy Information Administration, U.S. Department of Energy.

  9. Outcrop – Utica Shale Source: www.wikipedia.org/wiki/Utica_Shale.

  10. Short-Term Expectations Domestic Natural Gas Price

  11. Find Us Online www.aga.org www.truebluenaturalgas.org http://twitter.com/AGA_naturalgas www.facebook.com/naturalgas www.linkedin.com/company/50905?trk=tyah Christopher McGill Vice President Policy Analysis cmcgill@aga.org 202.824.7132

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