It's no surprise that this summer resulted in the highest natural gas burn rate on record. Low natural gas prices allowed more substitution by power plants (gas instead of coal) and consistently high temperatures across the US (particularly in the Midwest) created the demand.
EIA: - According to Bentek Energy, estimated daily natural gas use to produce electric power (also called power burn) averaged 26.3 billion cubic feet per day (Bcf/d) so far in 2012 (Jan 1 - Aug 15), up 24% compared to the same period for 2011. Bentek Energy, which has been estimating power burn since January 2005, said that 17 of the 25 highest days of power burn since 2005 occurred this summer between June 28 and August 9.
The two main drivers of the increased use of natural gas at power plants this year are weather and a structural shift toward generating more electricity from natural gas-fired power plants.
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| Source: EIA |
This brought the US natural gas inventories - which were unusually high due to the warm winter and high production levels - closer to normal levels for this time of the year.
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| Source: EIA |
Here is the breakdown of where in the US the burn rate was the highest. Not surprisingly it roughly follows the drought pattern (the map shows usage relative to historical patterns).
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| Source: EIA |
In spite of the heavy usage, natural gas prices remain subdued.
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| Source: Barchart |
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