Dive Brief:

• A 56% increase in the U.S. natural gas supply between 2012 and 2040 from new shale gas, tight gas, and offshore resources means natural gas-fueled electricity will grow to 1.6 billion megawatt-hours by 2040, a 1.3% average yearly increase throughout the country which will vary by region, according to the Energy Information Administration (EIA).
• The three highest growth regions for gas-generated electricity will be the SERC Reliability Corporation (SERC), the ReliabilityFirst Corporation (RFC) and the Western Electricity Coordinating Council (WECC).
• Gas in the first two will compete against growth in coal-generated electricity, despite its rising costs and plant closures, and gas in the third will compete more against renewables, while gas will provide almost all the new generation in the Texas Reliability Entity (TRE).

Dive Insight:

Despite near term competition with coal, which will remain the biggest single generation source through 2040, gas grows faster and more in SERC and RFC in the long term as electricity demand rises 1% in SERC and 0.6% in RFC. Only WECC and Florida will have more electricity demand growth than SERC through 2040 but SERC will grow more natural gas generation while they grow more renewables generation.

Gas-generated electricity will fall in both SERC and RFC through the end of this year due to high prices, gain in 2015 and 2016 with coal plant closures, fall off again because of high prices, and then regain momentum and grow past nuclear-generated electricity by 2035.

The RFC contains the Appalachian Basin's Marcellus Shale play, the country's largest and fastest-growing natural gas production basin, while the SERC and RFC contain portions of the Central Appalachian (CAPP) coal production basin, and the RFC also contains the Illinois Basin, where coal production has expanded rapidly.