COVID Fallout: U.S. Energy Consumption Fell Record 7% in 2020
The expert number crunchers at our favorite government agency, the U.S. Energy Information Administration (EIA), now have the lowdown on how the COVID-19 pandemic and resulting partial shutdown of the American economy affected energy use in 2020. Our country saw the largest one-year decline in energy usage–ever. Last year’s energy usage dipped 7% from the previous year. The biggest loser was the transportation sector which decreased energy usage by 15%. Even the residential sector with people staying home saw a slight decrease of 1% last year.
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The Enverus U.S. rig count continues to climb (a good sign). For the week ending March 31, the U.S. rig count climbed another 6 active rigs to 519. The oil-focused Permian Basin and Eagle Ford Shale each added four new rigs. The Marcellus stayed even at 33 active rigs, and the Ohio Utica stayed even at 12 active rigs (although the Marcellus dry gas lost a rig and Marcellus wet picked up a rig). The other major shale gas play, the Haynesville, picked up a rig and now operates 48 active rigs.
Good news. The expert forecasters at the U.S. Energy Information Administration (EIA) have had another look at their predictions for how much natural gas and electricity we will use here in the U.S. and decided to boost their projections for 2021 and 2022. Electric use will grow, EIA says, by 2.1% in 2021 over 2020. As for natural gas, EIA says average daily marketed gas production will increase by 610 million cubic feet per day (MMcf/d) in 2021 to 98.95 billion cubic feet (Bcf/d). EIA is now predicting natgas production in 2022 will increase by 1.7 Bcf/d to 100.63 Bcf/d. We’re pretty sure that would be a new, all-time record high.
Yesterday the Pennsylvania Independent Fiscal Office (IFO) released their latest quarterly Natural Gas Production Report for October through December 2020 (full copy below). There are two exciting bits of news coming from this report that (so far) nobody else is reporting: (1) After eight consecutive quarters (two years) of declining natgas production from shale (comparing the current quarter to the same quarter from the previous year), the trend reversed in 4Q20; and (2) even with all of the curtailments from Marcellus producers in PA last year, the state still produced a record high volume of natural gas–an all-time high record!
The pandemic did its best to shut the world down, and maybe it succeeded in shutting down other countries–but not here in the US of A. Against an onslaught of shutdowns (particularly in “blue” states), people staying home, businesses closing, anarchy and chaos in large Democrat cities…and against an onslaught against fossil fuels by environmental Nazis seeking to destroy the economies of the world via bans of oil and natural gas and coal…U.S. natural gas production decreased by just 1 percent last year. Can you believe it? That’s a victory in our book!
Well, what do you know? Donald Trump’s National Economic Council Director, Larry Kudlow, was absolutely right. We’re beginning to see a V-shaped recovery. Kudlow predicted the economy would bounce right back after the pandemic subsided. S&P Global Platts is showing there is a dramatic V-shaped recovery happening with natural gas production right now.
Another week, another rig count to share with you. As we often point out, rig counts go up and down each week, so it’s good not to get too wrapped up in the “up one week down the next” narrative. After the rig count crashed to historic, all-time lows last year (due to the pandemic and price war from Russia and Saudi Arabia), we began to report more frequently on the rig count. It has become an early indicator for the pace of our country’s economic recovery.