Stability is not the word that comes to mind when you think about 2020. However, stability was a recurring theme at this year’s North American Gas Forum (NAGF) where I participated in a panel discussion on the outlook of the market, alongside a group of energy industry experts and peers.
Stability is a critical part of the energy equation, especially for consumers like you and me. We all expect our lights to turn on when we flip the switch. We all want our homes to stay warm in the winter – and at an affordable price.
The abundance and low cost of natural gas are driving forces for those in the business of providing energy – be it electricity or heat. And with the growing urgency to address climate change, natural gas is providing immediate benefits by displacing coal-fired power generation, while making intermittent renewables like wind and solar more viable.
Natural gas demand to generate electricity, for residential use and for the industrial sector has remained steady in 2020 compared to 2019, despite the widespread economic effects of COVID-19, and we expect this trend to continue.
We don’t have a crystal ball at Williams, but we do have a great team of market analysts who recently modeled a variety of future scenarios for natural gas demand. They looked at what would happen to natural gas demand in a healthy economic recovery, a prolonged recession, a base case and a transition to a more extreme regulatory environment.
Even in the toughest scenarios we find that the market fundamentals of natural gas are solid. In fact, millions of households and businesses will continue to rely on electricity produced by clean natural gas as we transition away from coal-fired electricity, driving significant reductions in CO2 emissions. Likewise, as the world continues to seek additional access to cleaner, more reliable and less costly energy – natural gas will play a critical part in meeting the growing energy needs around the globe.
As winter approaches, the U.S. Energy Information Administration recently reported that consumers can expect to pay about the same as they did last year for home heating thanks to the stability of natural gas. That is certainly one thing we can find comfort in during this most unpredictable year.