There are many factors affecting the demand for natural gas. The following are ones that give us cause for our positive outlook toward the long-term potential of Direct Participation Programs in the funding of natural gas exploration and production ventures.
Factors Affecting Demand for Nautral Gas
- Natural gas cooling, combined heat and power, and distributed generation are expected to make inroads into the electricity market.
- Annual growth is projected at 5%, but as climate change legislation grows, demand for low carbon fuels such as clean natural gas increases as well.
- The demand for alternative fuel vehicles (including natural gas vehicles) is expected to increase in the foreseeable future primarily due to new legislation and regulation surrounding emissions.
- Imposition of stringent government regulations covering harmful emission of industrial processes may foster the use of natural gas as the cleaner burning alternative to coal and petroleum.
- Distributed generation technologies enable electricity utilities and private residences to take advantage of natural gas pricing.
- Total Energy Efficiency (TEE) may spur the consumption of natural gas as Energy Efficiency Regulations are put into place that measure the actual depletion of energy from point of generation to point of use. Natural gas is extremely efficient, losing very little energy value in its transport. Electricity on the other hand, has only 27% of its original energy value when it arrives at an outlet socket.
- Potential increase in the percentage of new construction single-family and multi-unit residences using natural gas.
- Industrial sector transition to less energy intensive manufacturing, switching away from coal and petroleum to natural gas for combined heat and power applications as inefficient, older equipment is retired.
- Industrial energy consumers, fearful of the effects of deregulation on the reliability and flexibility of electricity supply, may choose instead to generate their own electricity on-site, using natural gas.
- The EIA (Energy Information Agency) expects 57 percent of new electric generation capacity built by 2025 will be natural gas combined-cycle or combustion turbine generation.
- The increased demand for electricity in general, combined with the retirement of old nuclear, petroleum, and coal powered generation plants, leaves a significant requirement for electric generation that is expected to be filled by natural gas use.
- Source: www.naturalgas.org/business/demand.asp#factorshort
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