The Role of Natural Gas in North American Markets
Natural gas markets in North America have seen significant fundamental shifts in the past decade and will face additional changes in the coming years.
Since 2010, natural gas as a percentage of US power sector generation has grown from 22% to 39% largely due to low-cost shale gas supply. In 2020, lower natural gas demand resulting from COVID-19 pushed benchmark Henry Hub prices to the lowest level in decades. The US continues to increase its export of liquefied natural gas (LNG), which will reach 12% of total national demand in 2021. Meanwhile, Mexican demand for natural gas in the power and industrial sectors continues to rise while Canada is seeking market outlets for its ample Western Canadian supply.
The linkage between natural gas markets in North America and Europe, Asia and Latin America has grown and the US and Canada will continue to be a low-cost provider of LNG to the world for the foreseeable future. However, recent pledges by LNG importing countries in Europe and Asia to achieve net-zero carbon emissions by 2050, combined with the US and Canadian governments pushing forward with infrastructure and climate investments will put pressure on North American natural gas markets and drive further change.
In a webinar on 22 April, Claire Behrens, Peter Hubbard and Charles Merrick discuss:
- the future of North American natural gas markets under AFRY's Central scenario to 2050;
- potential drivers that could create an alternative view for natural gas demand; and
- analytics across the electric power and LNG sectors that inform how North American natural gas markets could evolve.
The slide pack and recording are below.