October2012

Short-Term Energy and Winter Fuels Outlook

EIAprojectsaveragehouseholdexpendituresforheatingoilandnaturalgaswillincrease by19percentand15percent,respectively,thiswinter(October1throughMarch31) comparedwithlastwinter.Projectedhouseholdexpendituresare5percenthigherfor electricityand13percenthigherforpropanethiswinter.Averageexpendituresfor householdsthatheatwithheatingoilareforecasttobehigherthananypreviouswinter onrecord(seeEIAShortTermEnergyandWinterFuelsOutlookslideshow). Theforecastforhigherhouseholdexpendituresprimarilyreflectsareturntoroughly normalwintertemperatureseastoftheRockyMountainscomparedwithlastwinters unusualwarmth.AccordingtotheNationalOceanicandAtmosphericAdministrations (NOAA)mostrecentprojectionofheatingdegreedays,theNortheast,Midwest,and Southwillbeabout2percentwarmerthanthe30yearaverage(19712000),butstill 20percentto27percentcolderthanlastwinter,whiletheWestisprojectedtobeonly about1percentcolderthanlastwinter. Projectedresidentialheatingoilpricesaverage2percenthigherandnaturalgasprices1 percenthigherthiswinter.Winteraverageelectricityandpropanepricesaverageabout 2percentand4percentlowerthanlastwinter,respectively. EIAexpectsU.S.totalcrudeoilproductiontoaverage6.3millionbarrelsperday(bbl/d) in2012,anincreaseof0.7millionbbl/dfromlastyear.ProjectedU.S.domesticcrudeoil productionincreasesto6.9millionbbl/din2013,thehighestlevelofproductionsince 1993. ForecastU.S.realgrossdomesticproduct(GDP)growsby2.2percentthisyearandby 1.7percentnextyear.ProjectedworldoilconsumptionweightedrealGDPgrowsby2.7 percentand2.5percentin2012and2013,respectively,similartolastmonthsOutlook. EIAexpectsBrentcrudeoilpricestofallfromrecenthighsovertherestof2012, averaging$111perbarreloverthefourthquarterof2012and$103perbarrelin2013. EIAexpectsWTIspotpricestoaverage$93perbarrelin2013,withtheWTIdiscountto Brentnarrowingto$9perbarrelbytheendof2013. NaturalgasworkinginventoriesendedSeptember2012atanestimated3.7trillioncubic feet(Tcf),about8percentabovethesametimelastyear.EIAexpectstheHenryHub

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

naturalgasspotprice,whichaveraged$4.00permillionBritishthermalunits(MMBtu) in2011,toaverage$2.71perMMBtuin2012and$3.35perMMBtuin2013.

ProjectedWinterFuelExpendituresbyFuelandRegion
TheaveragehouseholdwinterheatingfuelexpendituresdiscussedinthisOutlookprovidea broadguidetochangescomparedwithlastwinter,butfuelexpendituresforindividual householdsarehighlydependentonlocalweatherconditions,marketsize,thesizeandenergy efficiencyofindividualhomesandtheirheatingequipment,andthermostatsettings(seeWinter FuelsOutlooktable). NaturalGas.AboutonehalfofU.S.householdsusenaturalgasastheirprimaryheatingfuel. EIAexpectshouseholdsheatingwithnaturalgastospendanaverageof$89(15percent)more thiswinterthanlastwinter.Theincreaseinnaturalgasexpendituresrepresentslessthana1 percentincreaseintheaverageU.S.residentialpricefromlastwinteranda14percentincrease inconsumption.Theexpectedincreaseinconsumptionistheresultoftheforecastofnear normaltemperaturesthiswinter,incontrasttotheunusuallywarmwinterof201112.The projectedchangesinresidentialnaturalgaspricesthiswinterrangefroma3percentdeclinein theSouthtoa4percentincreaseintheNortheast.Pricechangesvaryacrossregionsbecause ofanumberoffactorssuchasregionalchangesinproduction,pipelinesupplycapacity,and differencesinregulatoryconstraintsinpassingpricechangesthroughtocustomers. HeatingOil.EIAexpectshouseholdsheatingprimarilywithheatingoiltospendanaverageof about$407(19percent)morethiswinterthanlastwinterasaresultofa2percentincreasein pricesanda17percentincreaseinconsumption.About6percentofU.S.householdsdepend onheatingoilforspaceheating;however,theNortheastaccountsforabout80percentofthese households.LowdistillatestocksintheEastCoastandGulfCoaststates,whichprovideover60 percentoftheNortheastsdistillatesupply,andthestateofNewYorksswitchoverfromhigher sulfurheatingoiltofuelwithlessthan15partspermillionsulfur,allcontributetoanexpected tightermarketthiswinter. Propane.About5percentoftotalU.S.householdsheatwithpropane.EIAexpectshouseholds heatingprimarilywithpropanetospendmorethiswinter,butthatincreasevariesacross regions.EIAexpectsthathouseholdsintheMidwestwillseeanaverageincreaseinboth propaneconsumptionandwinterpropaneexpendituresof17percentand11percent, respectively,withresidentialpropaneprices5percentlowerthanlastwinter.With consumptionprojectedtoincreaseby16percentoverlastwinterintheNortheast,households theremayseeanincreaseinexpendituresof15percentwithpriceslowerbyanaverage1 percent. Electricity.Householdsheatingprimarilywithelectricitycanexpecttospendanaverageof$49 (5percent)morethiswinterbecauseofforecastedcolderweatherdespiteaprojected2

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

percentdecreaseinprices.About38percentofallU.S.householdsrelyonelectricityastheir primaryheatingfuel,rangingfrom14percentintheNortheastto62percentintheSouth. Wood.Woodconsumptioninhomeshasrisenoverthepast10years,reversingatrendseenin thelasttwodecadesofthe20thcentury.In2009,U.S.householdsconsumedabout0.5 quadrillionBtu(quads)ofwood.Householdfueloilconsumption,bycomparison,wasonly slightlyhigherat0.6quads.InhomesacrosstheUnitedStates,woodismostcommonlyusedas asecondarysourceofheatandissecondonlytoelectricityasasupplementalheatingfuel. TwentypercentofNewEnglandhomes(1.1million)usedwoodforspaceheating,water heating,orcookingin2009(EIA,ResidentialEnergyConsumptionSurvey,2009).Thisisnearly twicethenationalrate.Almosthalfofallruralhouseholdsusedwoodinthisareaofthe country.Incontrast,only12percentofurbanNewEnglandhouseholdsusedthefuel.

GlobalCrudeOilandLiquidFuels
GlobalCrudeOilandLiquidFuelsOverview.EIAexpectstheoilmarkettolooseninthefourth quarterof2012,asgloballiquidfuelsconsumptionfallsfromitsseasonalpeakandoutputfrom countriesoutsideoftheOrganizationofthePetroleumExportingCountries(OPEC)recovers fromunplannedoutagesandscheduledmaintenance.Persistentunplannedproductionoutages innonOPECcountrieshelpedkeepthespotpriceforBrentcrudeoilnear$110perbarrelinthe thirdquarterof2012.EIAforecaststhatBrentcrude,abenchmarkfortheglobaloilprice,will average$111perbarrelforthefourthquarterof2012.In2013,EIAprojectstheBrentcrude pricetofalltoanaverageof$103perbarrel,althoughalingeringsupplyriskbecauseof instabilityintheMiddleEastandNorthAfricacouldkeeppriceshigher.EIAalsoexpectsglobal inventorybuildsinthefirsthalfof2013toreachhigherlevelsrelativetothesameperiodin 2012,mostlyduetoanincreaseinnonOPECsupply. GlobalCrudeOilandLiquidFuelsConsumption.Worldliquidfuelsconsumptiongrewbyan estimated1.1millionbbl/din2011.EIAexpectsconsumptiongrowthofabout0.8millionbbl/d in2012and0.9millionbbl/din2013,withChina,theMiddleEast,CentralandSouthAmerica, andothercountriesoutsideoftheOrganizationforEconomicCooperationandDevelopment (OECD)accountingforessentiallyallconsumptiongrowth.However,forecastconsumptionfalls by0.5millionbbl/dduringthefourthquartersof2012,followingtheendoftheglobalseasonal demandpeakinthethirdquarter. ProjectedOECDliquidfuelsconsumptiondeclinesby0.4millionbbl/din2012andbyan additional0.2millionbbl/din2013.AlthoughEIAforecastsU.S.liquidfuelsconsumptionto growby0.1millionbbl/din2013,thisismorethanoffsetbydeclinesinconsumptioninEurope andotherOECDcountries.OnepossibleexceptionisJapan,whereonlyahandfulofnuclear facilities,atbest,willbebroughtbackonlinein2013,whichcouldcauseitsoilconsumptionto remainrelativelyresilientthroughtheforecastperiod.

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

Chinahasbeenexperiencingaslowingofitseconomicgrowthrate.EIAsforecastforChinasoil consumptiongrowthremainsatlowerlevelsthanthecountryexperiencedinpreviousyears. EIAprojectsChinasliquidfuelsconsumptiontoriseby3.6percent(355thousandbbl/d)in 2012,thelowestrateofannualgrowthsince2001,andby400thousandbbl/din2013. NonOPECSupply.EIAexpectsnonOPECliquidfuelsproductiontoriseby570thousandbbl/d in2012,andbyafurther1.2millionbbl/din2013.ThelargestareaofnonOPECgrowthisNorth America,whereproductionincreasesby1.0millionbbl/dand670thousandbbl/din2012and 2013,respectively,duetocontinuedproductiongrowthfromU.S.onshoreshaleandothertight oilformationsandfromCanadianoilsands. SomelargenonOPECproducerscontinuetoundergoplannedmaintenancethattraditionally takesplaceduringthistimeoftheyear.Kazakhstanscrudeandcondensateproductionwas downbyabout160thousandbbl/dinSeptember2012becauseofplannedmaintenanceat Tengiz.Thefieldisslowlyreturningtonormaloperations.IntheNorthSeatheBuzzard,Elgin, andFranklinfieldsarecurrentlyoutformaintenance.Buzzardisexpectedtoreturntofull productionattheendofOctober.TotalannouncedthatElginandFranklinmaintenancewillbe extendedthroughDecember.MaintenanceinNorwaysfieldsreducedoutputbymorethan20 thousandbbl/dinSeptember2012.ThiswasmainlyduetomaintenanceattheTrollfield,but alsoincludessmallervolumesfromotherfields,suchasGullfaksandEkofisk. UnplannedoutagesanddisruptionstononOPECproductionincreasedinAugustand September,averagingaround1.1millionbbl/d.HurricaneIsaaccontributedtoproductionshut insintheGulfofMexicoaveragingabout210thousandbbl/dinbothAugustandSeptember. EIAhasmadeslightadjustmentsinitsforecastsforColombiaandBrazil,thetwoleadingsources ofnonOPECsupplyinSouthAmerica,dueinparttoloweroutputinrecentmonths.In Colombia,antigovernmentrebelshadintensifiedthefrequencyandseverityoftheirattackson theCaoLimnpipelineandotheroilinfrastructure,whichcontributedtoanestimateddecline inAugustproductionrelativetothepreviousmonthandyearagolevels.However,security threatshaveabatedinanticipationofpeacetalksandColombianoilproductionisestimatedto havepartiallyrecoveredinSeptember,whichhasledtorenewedoptimismthatthecountrycan resumeitsproductiongains.Brazilianliquidfuelsproductionhasalsoconsistentlyfailedtomeet expectationsinrecentmonthsduetopersistentmaintenancerelatedshutdowns,largerthan expectedfielddeclines,theimpactsofarelativelypoorsugarcaneharvestonethanol production,andthecontinuedoutageattheChevronoperatedFradefield.Unlessoutputis quicklyrestored,Brazilianliquidsproductionislikelytodeclineonayeartoyearbasis. SudanandSouthSudansignedaseriesofagreementstosettletheirdisputeandrestartoil productionintheSouth,eightmonthsafterSouthSudanhalteditscrudeoilexportsvia pipelinesthroughSudanandshutinallproduction.SudanandSouthSudanhadalreadyreached anunderstandingonoiltransitfees,buttheresumptionofproductionwascontingentona broaderdealonbordersecurity.Thetwocountrieshavenowsignedanagreementonsecurity

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

arrangements;however,somepostindependenceissuessuchasborderdemarcation,rightsto thedisputedAbyeiregion,andSudansclaimforcompensationofSudapetsassetsthatwentto SouthSudanremainunresolved.Nonetheless,SouthSudanexpectstorestartproductionand exportsbeforetheendofthisyear,buthaspreviouslycautioneditcouldtakefourtosixmonths tobringoutputbacktofullvolumes,possiblylongerforareasdamagedduringmilitaryclashes. ForecastingSouthSudansoilrestartandthepaceoftherampupremainsachallengegiven uncertaintiesinclude:theextentofdamagetoinfrastructureatfieldswithintheGreaterNileOil Project;theabilityforsomematurefieldsthatwerepreviouslydeclininginoutputtoreachpre shutinlevels;theextenttowhichtheshutinleftanypermanentirreversibledamagethatcould compromisefutureoutput;howquicklyexportpipelineswillbeflushedout;andanyother mechanicalissuesthatmayariseduringtherestart.EIAdoesnotexpectSouthSudans productiontoreturntopreshutinlevelsintheforecastperiod. OPECSupply.EIAexpectsthatOPECmemberswillcontinuetoproducemorethan30million bbl/dofcrudeoiloverthenexttwoyearstoaccommodatetheprojectedincreaseinworldoil consumptionandtocounterbalancesupplydisruptions.ProjectedOPECcrudeoilproduction increasesbyabout1.2millionbbl/din2012andremainsmostlyflatin2013.OPECnoncrude oilliquids(condensates,naturalgasliquids,andgastoliquids),whicharenotcoveredbyOPECs productionquotas,averaged5.3millionbbl/din2011andareforecasttoincreaseby0.3million bbl/din2012andby0.2millionbbl/din2013. EIAestimatesthatIranscrudeoilproductiondeclinedby50thousandbbl/dinSeptember2012, followinga100thousandbbl/ddeclinethemonthbefore.EIAexpectsIranscrudeoil productiontofallbyabout1millionbbl/dbytheendof2012,relativetoanestimatedoutput levelof3.6millionbbl/dattheendof2011.ThedeclineinIranscrudeoilproductioncapacity willcontinueduetothecountrysinabilitytocarryoutinvestmentprojectsthatarenecessaryto offsetthenaturaldeclineinproductionfromexistingwells. ItisdifficulttodifferentiatebetweentheeffectsofthelatestroundofsanctionsonIranand thoseenactedinpreviousyearswhenassessingimpactsonIranianoilproduction.While countriesintheEuropeanUnionappeartohaveceasedimportsofIraniancrudeoil,the reinsurancebanaffectedIransabilitytosellitscrudetosomeofitslargestcustomersinAsia, includingJapanandSouthKorea.MostofIranscrudeoilcustomershavebeenabletoreplace insurancecoverage,onceprovidedbyEuropeanprotectionandindemnity(P&I)clubs,overthe lasttwomonths,althoughpreliminarydatashowaverysmallincreaseinimportsofIranian crudeoilbythosecustomersinAugust.EIAbasesthisassessmentonpreliminarycommercial dataontankerliftingsfromIran,pressreports,officialIranianstatements,andotherrelevant information.Thistentativeinterpretationofaveryfluidsituationcouldchangeasdataare revisedandmoredetailsemerge. TheattacksonAmericanpersonnelinBenghazi,Libya,serveasatragicreminderthatinsecurity continuestoplaguethecountry,includingsomeareasinwhichoilinfrastructureis

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

concentrated.ThoughLibyahascontinuedtomaintainproductionatrelativelyhighlevelsand recentlyrestarteditslargestrefinery,itposesadownsiderisktothesupplyforecastgiventhe possibilityoffuturedisruption. Worldoilsurplusproductioncapacityisalmostentirelyconcentratedinonecountry:Saudi Arabia.WithSaudiArabianoilproductionatornear10millionbbl/dformuchof2012,global surplusproductioncapacityhasbeenintheneighborhoodof2millionbbl/dduringthistime. OECDPetroleumInventories.EIAestimatesthatOECDcommercialoilinventoriesended2011 at2.60billionbarrels,equivalenttojustunder56daysofforwardcover.ProjectedOECDoil inventoriesincreaseto2.64billionbarrelsand57daysofforwardcoverbytheendof2012. Forecastdaysofsupplyareatthehighestendofyearlevelssince1991becauseofthedeclinein OECDconsumptionoverthelast7years. CrudeOilPrices.EIAprojectsthepriceofBrentcrudeoilwillaverage$112perbarrelin2012 and$103perbarrelin2013,bothmostlyunchangedfromlastmonthsOutlook.EIAexpectsthe WTIpricetoaverage$93perbarrelinthesecondhalfof2012andlargelyremainatthislevel throughouttheforecastperiod.Afterincreasingtoashighas$19perbarrelinAugustand Septemberofthisyear,EIAexpectsthattheWTIcrudeoilspotpricediscounttotheBrentcrude oilspotpricewillaverage$17perbarrelinthefourthquarterof2012beforefallingto$9per barrelbytheendof2013. Energypriceforecastsarehighlyuncertain(MarketPricesandUncertaintyReport).WTIfutures forJanuary2013deliveryduringthefivedayperiodendingOctober4,2012,averaged$92.09 perbarrel.Impliedvolatilityaveraged31percent,establishingthelowerandupperlimitsofthe 95percentconfidenceintervalforthemarket'sexpectationsofmonthlyaverageWTIpricesin January2013at$70perbarreland$121perbarrel,respectively.Lastyearatthistime,WTIfor January2012deliveryaveraged$79perbarrelandimpliedvolatilityaveraged50percent.The correspondinglowerandupperlimitsofthe95percentconfidenceintervalwere$51perbarrel and$123perbarrel.

U.S.CrudeOilandLiquidFuels

U.S.LiquidFuelsConsumption.Totalliquidfuelsconsumptionfell230thousandbbl/d(1.2 percent)in2011,drivenbya240thousandbbl/ddropinmotorgasolineconsumption.Forecast totalliquidfuelsconsumptionfallsby280thousandbbl/d(1.5percent)in2012includinga declineinmotorgasolineconsumptionof30thousandbbl/d.Warmweatherduringthefirst halfoftheyearcontributestoaprojected110thousandbbl/ddeclineindistillatefueloil consumptionin2012.In2013,totalliquidfuelsconsumptionincreasesby110thousandbbl/d (0.6percent).Mostoftherecoveryinconsumptionnextyearcomesfromdistillatefueloiland naturalgasliquidsconsumption,whichrisebecauseofcontinuedgrowthinfreightshipments andindustrialuseaswellastheassumptionofnearnormalweatherthiscomingwinter.

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

DespitehigherassumedgrowthinU.S.realdisposableincomeandprojecteddeclinesinretail gasolinepumppricesof6percentin2013,forecastmotorgasolineconsumptionremainsalmost unchangedfromthatofthepreviousyearbecauseofcontinuedslowgrowthinthedrivingage population,improvementsintheaveragefueleconomyofnewvehicles,andincreasedratesof retirementofolder,lessfuelefficientvehicles. U.S.LiquidFuelsSupplyandImports.Domesticcrudeoilproductionincreasedbyanestimated 180thousandbbl/d(3.2percent)to5.7millionbbl/din2011.Forecastcrudeoilproduction increasesto6.3millionbbl/din2012withlower48(excludingthefederalGulfofMexico)crude oilproductiongrowingby780thousandbbl/d,primarilyfromtheBakken,Permianbasin,and EagleFordproducingareas.HurricaneIsaacintheGulfofMexicoledtoU.S.crudeoil productionshutinsaveraging220thousandbbl/dinAugustand200thousandbbl/din September.Totalcrudeoiloutputrisesafurther530thousandbbl/din2013.Thenumberof onshoreoildirecteddrillingrigsreportedbyBakerHugheshasincreasedfrom777atthe beginningof2011to1,191atthestartof2012,andto1,398asofOctober5,2012. TheshareoftotalU.S.consumptionmetbyliquidfuelnetimportsofbothcrudeoiland productshasbeenfallingsincepeakingatover60percentin2005.In2011,itaveraged45 percent,downfrom49percentin2010.EIAexpectsthatthetotalnetimportshareof consumptionwillcontinuetodeclineto41percentin2012andto39percentin2013because ofthesubstantialincreasesindomesticcrudeoilproduction.Ifthe2013forecastholdstrue,it wouldbethefirsttimetheshareoftotalU.S.consumptionmetbyliquidfuelnetimportsisless than40percentsince1991. U.S.PetroleumProductPrices.Afterasharpincreaseinretailgasolinepricesearlierthisyear, themonthlyaveragepriceforregulargradegasolinereached$3.90pergalloninApril2012. Pricesthenfellforthreeconsecutivemonths,averaging$3.44pergalloninJuly.Risingcrude pricescontributedtoasecondrunupinregulargasolineretailpricestoanaverageof$3.85per galloninSeptember2012.EIAexpectsretailgasolinepricestobegindeclininginOctoberasthe gasolinemarkettransitionsfromsummergradetowintergradegasolinespecificationsand forecastcrudeoilpricesbegintofall.Projectedregulargasolineretailpricesaverage$3.60per gallonduringthefourthquarterof2012,upslightlyfrom$3.58pergallonprojectedinlast monthsOutlook.Projectedregulargasolineretailpricesaverage$3.65pergallonin2012and $3.44pergallonin2013. Dieselfuelretailpricesrosefromamonthlyaverageof$3.83pergallontoJanuary2012toa highof$4.13inMarch,thenfelltoalowof$3.72inJuly.Tightmarketconditionsandincreasing crudeoilpricesdroveonhighwaydieselfuelpricesbacknearmonthlyhighsfortheyear average$4.12pergalloninSeptember.EIAexpectsthatonhighwaydieselfuelretailpriceswill average$3.98pergallonduringthefourthquarterofthisyearand$3.81pergallonin2013. Wholesaledieselmargins(thedifferencebetweenthewholesalepriceofdieselandtherefiner acquisitioncostofcrudeoil)averaged60centspergallonthefirsthalfof2012beforeclimbing toanestimated85centspergalloninSeptember,thehighestlevelsinceMay2008.In2012,

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

EIAprojectsthosemarginswillaverage68centspergallonin2012and63centspergallonin 2013,comparedwiththeprevious5yearaverageof52centspergallon.

NaturalGas
U.S.NaturalGasConsumption.EIAexpectsthatnaturalgasconsumptionwillaverage69.8 billioncubicfeetperday(Bcf/d)in2012,anincreaseof3.1Bcf/d(4.7percent)from2011.Large gainsinelectricpowerusein2012morethanoffsetdeclinesinresidentialandcommercialuse. Projectedconsumptionofnaturalgasintheelectricpowersectoraverages25.4Bcf/din2012, 22percenthigherthanin2011,primarilydrivenbytheimprovedrelativecostadvantagesof naturalgasovercoalforpowergenerationinsomeregions.Consumptionintheelectricpower sectorduring2012was35.1Bcf/dinJuly2012,whenelectricitydemandforairconditioningwas highest. Projectedtotalnaturalgasconsumptiondecreasesby0.2Bcf/d(0.2percent)in2013.Expected declinesintheelectricpowersectoroffsetincreasesinresidential,commercial,andindustrial consumption.Aforecastofnearnormalweatherduringtheupcomingwinter(i.e.,colderthan lastyearsabnormallywarmwinter)drives2013increasesinresidentialandcommercial consumptionof11.5percentand10.3percent,respectively.Althoughprojectedhighernatural gaspricescontributetoa10.4percentdeclineinforecastnaturalgasconsumptioninthe electricpowersectorin2013,consumptioninthepowersectornextyearisstillexpectedtobe about1.9Bcf/dhigherthan2011levelsandhighbyhistoricalstandards. U.S.NaturalGasProductionandImports.Totalmarketedproductionofnaturalgasgrewby4.8 Bcf/d(7.9percent)in2011.Thisstronggrowthwasdriveninlargepartbyincreasesinshalegas production.Sofarduring2012,productionhasfluctuatedwithsmallupsanddowns,incontrast tothestrongupwardgrowthseenbetween2009and2011.EIAexpectssomesmalldeclinesin productioninthecomingmonths,relatedtorecentdropsintherigcount.AccordingtoBaker Hughes,thenaturalgasrigcountwas437asofOctober4,2012,comparedwith811atthestart of2012.EIAforecaststhattotalmarketedproductiongrowthwillslowto2.6Bcf/din2012and 0.4Bcf/din2013,asthereductionindrillingactivityisoffsetbygrowthinproductionfrom liquidsrichnaturalgasproductionareassuchastheEagleFordandwetareasoftheMarcellus Shale,andassociatedgasfromthegrowthindomesticcrudeoilproduction. EIAexpectspipelinegrossimportswillfallby0.2Bcf/d(2.3percent)in2012,asdomesticsupply continuestodisplaceCanadiansources.ThewarmwinterintheUnitedStatesearlythisyear alsoaddedtotheyearoveryeardeclineinimports,particularlytotheNortheastwhere importednaturalgascanserveasadditionalsupplyintimesofverycoldweather.EIAexpects littlechangeinpipelinegrossimportsin2013.Pipelinegrossexportsgrewby1.0Bcf/d(33 percent)in2011,drivenbyincreasedexportstoMexico,butareexpectedtoremainmostlyflat in2012,andgrowby0.1Bcf/din2013.

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

Liquefiednaturalgas(LNG)importsareexpectedtofallbyaboutonehalfin2012fromtheyear before.EIAexpectsthatanaverageofabout0.5Bcf/dwillarriveintheUnitedStates(mainlyat theElbaIslandterminalinGeorgiaandtheEverettterminalinNewEngland)bothin2012and 2013,eithertofulfilllongtermcontractobligationsortotakeadvantageoftemporarilyhigh localpricesduetocoldsnapsanddisruptions.HigherpricesforLNG,particularlyinAsian markets,havemadetheUnitedStatesamarketoflastresortforLNGsuppliers. U.S.NaturalGasInventories.Workingnaturalgasinventoriesremainathistoricallyhighlevels forthistimeofyear.AsofSeptember28,2012,accordingtoEIAsWeeklyNaturalGasStorage Report,workinginventoriestotaled3,653Bcf,whichis272Bcfgreaterthanlastyearsleveland 281Bcfabovethefiveyearaverage.EIAexpectsthatinventorylevelsattheendofOctober 2012willsetarecordhighof3,903Bcf.Becauseofveryhighinventoriesatthestartofthe summerinjectionseasonthisyear,workinginventorieshaveremainedhighandstockbuilds havebeenbelowboththefiveyearaverageandlastyearslevelsinceApril2012,withafew exceptions.Theprojectedincreaseof1,426Bcfinworkinggasinventoryduringthe2012 injectionseason(fromthebeginningofAprilthroughtheendofOctober)wouldbethesmallest buildsince1987. U.S.NaturalGasPrices.Naturalgasspotpricesaveraged$2.85perMMBtuattheHenryHubin September2012,up$0.01perMMBtufromtheAugustaverageand$1.05perMMBtu(27 percent)lowerthantheSeptember2011average.Whileabundantsupplieshavekeptprices relativelylow,ahotsummerandassociatedincreasesindemandfornaturalgasforpower generationcontributedtoHenryHubspotpriceincreasesthissummer,fromthemonthly averagelowof$1.95perMMBtuinApril2012.EIAexpectstheHenryHubnaturalgaspricewill average$2.71perMMBtuin2012and$3.35perMMBtuin2013. NaturalgasfuturespricesforJanuary2013delivery(forthefivedayperiodendingOctober4, 2012)averaged$3.84perMMBtu.Currentoptionsandfuturespricesimplythatmarket participantsplacethelowerandupperboundsforthe95percentconfidenceintervalfor January2013contractsat$2.77perMMBtuand$5.31perMMBtu,respectively.Atthistime lastyear,theJanuary2012naturalgasfuturescontractaveraged$4.10perMMBtuandthe correspondinglowerandupperlimitsofthe95percentconfidenceintervalwere$3.10per MMBtuand$5.40perMMBtu.

Coal
U.S.CoalSupply.EIAforecaststhatcoalproductionwilldeclineby6percentin2012as domesticconsumptionfalls.EIAexpectsthatproductionwilltotal1,027millionshorttons (MMst)in2012,68MMstbelowthe2011total.EIAexpectsproductiontofallby1percent(12 MMst)in2013asinventorydrawsandlowerexportsoffsetanincreaseindomestic consumptionintheforecast.Electricpowersectorstocks,whichended2011at175MMst,are forecasttototal187MMstattheendofthe2012.Inventoriesareexpectedtodeclineslightlyin 2013,buttheywillremainatelevatedlevels.

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

 U.S.CoalTrade.EIAexpectsU.S.coalexportstoremainstrongin2012andexceedthe107 MMstexportedin2011.TheUnitedStatesexported11.6MMstofcoalinJuly,thefifth consecutivemonthwithexportsexceeding11MMst.EIAprojectscoalexportstototalarecord 125MMstin2012.EIAexpectsthatcoalexportswilldeclinein2013butremainabove100 MMstforthethirdstraightyear.Fallinginternationalcoalpricesandslowereconomicgrowth, particularlyinChina,areprimaryreasonsfortheexpecteddeclineincoalexports.U.S.exports couldbehigheriftherearesignificantsupplydisruptionsfromanyofthemajorcoalexporting countries.U.S.coalexportsaveraged56MMstinthedecadepreceding2011. U.S.CoalPrices.Deliveredcoalpricestotheelectricpowerindustryincreasedsteadilyoverthe 10yearperiodendingin2011,whenthedeliveredcoalpriceaveraged$2.40perMMBtu(a6 percentincreasefrom2010).However,EIAexpectsthedeclineindemandforcoal,combined withlargecoalinventories,willbegintoputdownwardpressureoncoalpricesandcontributeto theshutinofhighercostproduction.EIAforecaststhatthedeliveredcoalpricewillaverage $2.40perMMBtuin2012and$2.42perMMBtuin2013.

Electricity
U.S.ElectricityConsumption.Duringthispastwinter,U.S.heatingdegreedaysduringthe fourthquarterof2011andthefirstquarterof2012totaled18percentbelowthe30year normal.Temperaturesthiswinterareexpectedtobecolderthanlastwinter.Inparticular, projectedheatingdegreedaysinthesouthernstates,whereamajorityofhomesheatwith electricity,are27percenthigherthanlastwinter.Asaresultofthecolderweather,EIAprojects retailsalesofelectricitytotheresidentialsectorthiswinterwillaverage6.2percentmorethan retailsaleslastwinter. U.S.ElectricityGeneration.Naturalgaspriceshaverisensteadilysincethispastspring.In September,theHenryHubpriceaveraged$2.85permillionBtu,whichwas46percenthigher thantheaverageinApril.WithhighernaturalgaspricesEIAexpectsnaturalgastolosesomeof itsrecentgainsinelectricitygenerationmarketshare.Theshareoftotalgenerationfueledby naturalgasinthefourthquarterof2012isprojectedtoaverage27.8percentcomparedwith 25.4percentduringthesameperiodlastyear.Bythebeginningof2013,highernaturalgas pricesshouldcontributetoyearoveryeardeclinesinnaturalgassshareoftotalgeneration. EIAexpectsnaturalgastofuel25.8percentofgenerationduringthefirstquarterof2013,which is2.8percentagepointslowerthanduringthefirstquarterof2012. U.S.ElectricityRetailPrices.EIAexpectsthenominalU.S.residentialelectricitypricewillriseby 0.4percentduring2012toanaverageof11.84centsperkilowatthour.During2013,U.S. residentialretailelectricitypricesincrease1.3percentovertheaverage2012price.When measuredinrealterms,theU.S.residentialelectricitypricedeclinesby1.7percentin2012and by0.3percentin2013.

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RenewablesandCarbonDioxideEmissions
U.S.Renewables.Aftergrowingby13.9percentin2011,totalrenewableenergyconsumption isprojectedtodeclineby2.3percentin2012.Thisdecreaseistheresultofhydropoweruse fallingby0.4quadrillionBtu(13.8percent)asitbeginstoreturntoitslongtermaverage.The declineinhydropowerfrom2011to2012morethanoffsetstheprojectedgrowthinthe consumptionofotherrenewableenergyforms.Renewableenergyconsumptionincreases2.4 percentin2013ashydropowercontinuestodecline(2.3percent)butnonhydropower renewablesgrowbyanaverageof4.8percent. Undercurrentlaw,federalproductiontaxcreditsforwindpoweredgenerationwillnotbe availableforturbinesthatbeginoperatingaftertheendof2012.Windpoweredgeneration, whichgrewby26percentin2011,isforecasttogrowanadditional16percentin2012.The outlookforwindcapacityadditionsandgenerationin2013willlikelydependonwhatever decisionismaderegardingtheextensionofproductiontaxcredits. AsaresultofdroughtconditionsdepressingcornharveststhroughouttheMidwest,fuelethanol productionfellfromanaverageof890thousandbbl/dduringthesecondquarterof2012toan averageof820thousandbbl/dinthethirdquarter2012.EIAexpectsethanolproductionwill remainnearcurrentlevelsthroughthefirsthalfof2013andrecoverinthesecondhalfof2013, averaging850thousandbbl/d(13.03billiongallons)fortheyear.Theprojectedlowerethanol productionisgenerallymatchedbylowerethanolexports. Biodieselproductionaveragedabout63thousandbbl/d(0.97billiongallons)in2011.Forecast biodieselproductionaverages67thousandbbl/din2012and83thousandbbl/din2013,with biodieselblendingmeetingtheRenewableFuelStandardrequirementsof1.0billiongallonsand 1.28billiongallonsrespectivelyinthoseyears. U.S.EnergyRelatedCarbonDioxideEmissions.Afterdecliningby2.3percentin2011,fossil fuelemissionsareprojectedtofurtherdeclineby2.7percentin2012.Thisdeclineisfollowed byanincreaseof1.9percentin2013.Petroleumemissionsfallby1.4percentin2012andgrow 0.2percentin2013.Naturalgasemissionsriseby5.2percentin2012andfallby0.4percentin 2013.Coalemissionsdecline9.7percentin2012,butareprojectedtoriseby6.0percentin 2013asrisingnaturalgaspricesleadtoincreasesincoalfiredelectricitygeneration.

U.S.EnergyInformationAdministration|ShortTermEnergyOutlookOctober2012

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