In 2022, the United States consumed about 32 trillion cubic feet (Tcf) of natural gas.1 For reference, the volume of an Olympic swimming pool is about 88,000 cubic feet, meaning the country currently consumes over 367,000 pools worth of natural gas a year. That level of annual natural gas consumption was the country’s highest ever and continued a general upward trend over the last thirty years, driven in large part by the surge in domestic production from the fracking revolution that began in the early 2000s.
Natural gas deliveries to end users have two components: the sales volume for the delivering company plus the volume transported through the system where the delivering company never owns the gas. There are four major categories of delivery companies: (i) investor-owned distributors; (ii) municipally-owned distributors; (iii) intrastate pipelines, and (iv) interstate pipelines. These companies sell or transport gas they do not own to various end users: residential, commercial, industrial, or electric utility consumers.
Nearly all residential and commercial gas deliveries come from local utilities or municipalities because the typical household, restaurant, or hospital consumer does not have sufficient consumption to warrant seeking an alternative to its local distribution system. In contrast, 52% of the gas delivered to industrial consumers comes from independent pipelines because they require large volumes of fuel to be delivered on a consistent and reliable basis. Natural gas fuels vital manufacturing processes such as steel, glass, iron, chemicals, and fertilizers.
The largest end-use customer of natural gas is electric power. Two-thirds of natural gas consumed by power plants is transported from out of state via interstate pipelines due to the massive volumes of gas required by just a single plant. About one-quarter of the gas used in power plants comes from investor-owned distributors, including cases where the gas is used in company-owned generation facilities.
Unsurprisingly, natural gas deliveries are highest in states with the largest populations and economies such as Texas, California, New York, Ohio, and Florida. In addition to large economies and populations, deliveries in Texas are influenced by tremendous amounts of local oil and gas production that create an ecosystem of gas-powered industrial and electric power facilities in the state. Intrastate pipelines have less overall regulation compared to interstate pipelines. All else being equal, manufacturers and independent power producers prefer to be geographically close to natural gas supply in a market with fewer regulations.
Per capita deliveries to Louisiana are by far the highest in the nation, at roughly 330 thousand cubic feet (Mcf) per person. The next highest state is Mississippi at 186 Mcf/person, almost half that of Louisiana. Louisiana is like Texas in that the state is a major gas producer and much of the consumption in the state is related to industrial activity.
Natural gas supplied 35% of total energy used in the United States in 2022. It will continue to be a major component of the nation’s energy portfolio due to abundant domestic supply, the ongoing shift away from coal in electricity generation, and the growing investment in liquefied natural gas (LNG) export infrastructure. But city, state, and national efforts to achieve carbon-neutral energy systems will reduce the demand for gas, albeit more slowly than some climate activists desire. Deliveries to residential and commercial customers for heating and cooking are slowly being replaced by heat pumps, electric boilers, and induction and electric cooktops. Home electrification is a part of many local governmental climate plans, taking shape as incentives to install new systems or, in places like California and Massachusetts, experimenting with banning natural gas hookups in new buildings.2
Natural gas demand by industry seems likely to remain strong in the near term because electrification of some processes is challenging and because the supply of low-carbon substitutes like green hydrogen is in the early stages of development. In addition, a massive buildout of renewable energy infrastructure will consume large amounts of steel, aluminum, glass, and other materials needed for wind turbines, electric vehicle charging, solar panels, and more.
1 U.S. Energy Information Administration (EIA), Monthly Energy Review (September 2023), Tables 4.1, 4.3, and 4.4; and EIA estimates based on previous year’s data. https://www.eia.gov/totalenergy/data/flow-graphs/natural-gas.php
2 S&P Global Market Intelligence, “Gas Ban Monitor: 1st Mass. bans advance amid broader New England push,” November 8, 2023, Link