Natural gas production in the United States is on pace to decline this year as energy demands soar and concerns grow about sufficient flow of power for a reliable electric grid, according to the Energy Information Administration.
The agency revealed its forecasts on Tuesday in its Short Term Energy Outlook, which now predicts 2024 will be the first year natural gas output has declined since 2020 – a development that is likely to fuel GOP criticism of President Joe Biden’s focus on clean energy as he prepares to leave office.
EIA estimated that natural gas production in the U.S. will hit 103.5 billion cubic feet per day (bcfd) this year – dropping from 103.8 bcfd in 2023. This is slightly higher than what EIA had predicted in September (around 103.4 bcfd).
At the same time, the country’s consumption of natural gas is soaring. EIA projected domestic consumption will jump from 89.1 bcfd last year, to 90.1 bcfd in 2024. Last month, the agency had estimated consumption would be around 89.9 bcfd.
The EIA also estimated that the U.S. was on track to see smaller oil demand growth in the next year than what was previously forecasted. In the Tuesday report, EIA predicted that U.S. oil demand will rise to 20.5 million barrels per day in 2025, down from previous projections of 20.6 million barrels. Demand for this year is reportedly expected to remain at 20.3 million barrels per day.
The decline in natural gas production comes as the Biden administration has prioritized electrification of the grid, backing alternative and renewable energy sources like solar and wind. President Joe Biden and his energy policy have come under fire in recent months as key industry players, including grid operator PJM Interconnection, have warned of an imbalance.
Earlier this year, PJM raised its rates by more than 800%, pointing to the combined effect of power sources like coal decreasing while the demand for energy is growing at a faster rate than renewable sources are being added.
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Strain on the grid is only expected to grow in the coming years amid the AI revolution, as tech giants develop massive data center facilities that have projected to use upward of 9% of electricity generated on the grid by 2030.
While gas output is projected to fall this year, EIA has estimated production will increase to 104.6 bcfd in 2025. At the same time, consumption is expected to fall back to 89.1 bcfd the same year.