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Summer Outlook Cooling Season
2014
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Looking Ahead to Summer 2014 Market pressure points: demand, economy, weather,
storage & production Wild card factors Summer expectations
Summary
2014 Summer Outlook: Outline
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Understanding the Symbols
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Upward market pressure
Flat market pressure
Downward market pressure
Market Pressure Points 2014
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Last Summer 2013 ACTUAL
This Summer 2014 FORECAST
Actual season: 6% cooler than 2012 5% warmer than 30-year average
1,293 Cooling degree days
1% warmer than last year 6% warmer than 30-year average
Summer-to-summer pressure on natural gas prices
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Source: NOAA forecast map, May 2014 1,306 Cooling degree days
Weather Demand: Summer Season Data source: NOAA, EVA
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Summer Season Last Summer Period-to-period change 2013 Data source: IHS Global Insight ACTUAL
Summer 2014
FORECAST
Economy Fell short of expectations Expanding
GDP growth 1.8% 2.4% Unemployment rate 7.4% 6.5% Manufacturing 2.4% 3.6% CPI 1.5% 2.0% Consumer Sentiment Index 81.6 86.5
Summer-to-summer pressure on natural gas prices
Pressure Point: Economy/Demand
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Summer Season Last Summer Period-to-period change 2013 Data source: U.S. Energy Information Administration; EVA ACTUAL
Summer 2014 FORECAST
Total Demand Industrial demand Electric demand Residential/commercial
60.2 Bcf/d 19.4 Bcf/d 23.8 Bcf/d 11.4 Bcf/d
60.4 Bcf/d 20.3 Bcf/d 23.1 Bcf/d 11.4 Bcf/d
Change from previous year +0.3%
Growth sector Residential/ Commercial Industrial
Summer-to-summer pressure on natural gas prices
Overall Gas Demand/Consumption
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Note: 2010, 2011 and 2012 denote very hot summers. Coal-to-gas switching in 2014 is forecasted. Source: EVA, May 2014
Portion of Electric Demand Attributable to Coal-to-Gas Switching Follows Price
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Source: Energy Ventures Analysis, Outlook for Natural Gas Demand for the Summer of 2014, Exhibit 14 “New U.S. Generation Capacity”
Steady Growth in New Natural Gas-fired Generation Capacity 2010-2015
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Total = 4.7 BCF/DAY
Majority of Industrial Growth Occurs in Fertilizer, Gas-to-Liquids Sectors Growth by industrial application 2010-2019
Source: Energy Ventures Analysis, 2014
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Storage/Demand Summer Season Period-to-period change Data source: EIA, EVA
Last Summer 2013
ACTUAL
Summer 2014
FORECAST
Season starting point (billion cubic feet)
1,687 Bcf
826 Bcf
Average weekly injections 68 Bcf 83 Bcf projected
End-of injection season 3,816 Bcf 3,400 Bcf projected
Summer-to-summer pressure on natural gas prices
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Note: 2014 is estimated. Source: EIA and EVA, 2014
Storage Injections 2003-2014 Record-breaking Storage Injections Projected
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Source: EIA and EVA, 2014
Total = 4.4 Tcf
Two-thirds of Storage Near Consumers Producing Region Characterized by Flexible Salt Dome Storage
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Summer Season Period-to-period change Data source: EIA, EVA
Last Summer 2013
ACTUAL
Summer 2014
FORECAST
Summer average production 66.6 Bcf/d 68.5 Bcf/d
Canadian imports (net) 5.0 Bcf/d 5.0 Bcf/d
LNG imports 0.3 Bcf/d 0.3 Bcf/d
Mexican exports -1.8 Bcf/d -1.9 Bcf/d
Summer-to-summer pressure on natural gas prices
Production/Supply
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Summer Outlook: Wild Cards Hot summer could increase electric demand
End to California drought /mild summer could decrease electric demand Very active hurricane/storm season
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Summer Season Period-to-period change
This Summer 2014 FORECAST
Weather
Economy
Overall demand
Storage
Overall supply
Summer 2013-to-summer 2014 Pressure on natural gas prices
This Season’s Summer Outlook
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Summary Increase in natural gas supplies supporting continued
industrial and electric growth Natural gas serving demand and storage needs at
record pace Fuel switching persists for sixth straight summer -- but
retreats to 2010 levels
