The U.S. Energy Information Administration (EIA) expects U.S. liquefied natural gas (LNG) exports to average 10.5 billion cubic feet per day during the second half of 2022, which is a 6% decrease from the first half of the year, according to the agency’s July 2022 Short-Term Energy Outlook (STEO). That amount is a 14% decrease in U.S. LNG exports from EIA’s June forecast.

EIA revised its estimates based on an outage at the Freeport LNG facility, which is expected to last until late 2022. Freeport accounts for 17% of U.S. LNG export capacity.

“With less LNG being exported in the second half of the year, more natural gas is likely to stay in the domestic market,” said EIA Administrator Joe DeCarolis. “We expect lower U.S. natural gas prices for the rest of 2022 than we had previously forecast, but lower prices in 2022 led us to reduce our expectations for natural gas production.”

EIA forecasts the U.S. Henry Hub spot price will average $5.97 per million British thermal units (MMBtu) during the second half of 2022, down 44% from the June forecast. For the last three quarters of 2023, EIA expects natural gas prices will average $4.36/MMBtu, up 14% from the June forecast. EIA also expects that more natural gas will be in storage heading into this winter than it had forecast in June.

Other key takeaways from the July 2022 STEO forecast include:

  • EIA expects U.S. refineries to run at an average of 94% of their capacity during the third quarter of 2022, a higher capacity factor than in previous years. At the same time, refinery capacity in the United States has decreased since 2019. “Less refining capacity means the United States will produce less gasoline and diesel fuel this year than in 2019, even though the remaining refineries are pretty much maxing out their production,” DeCarolis said.
  • EIA expects coal consumption to decrease by 3% in 2022 and by 4% in 2023, as 24 gigawatts of coal-fired power plants retire by the end of 2023. “Right now, coal-fired power plants appear to be preserving their coal stocks for use later in the summer when electricity demand peaks,” DeCarolis said.
  • EIA expects renewable energy to provide 24% of U.S. electricity generation in 2023, up from 20% in 2021. The growth in generation from renewables is primarily driven by solar power, with 71% more capacity by the end of 2023 than at the end of 2021. EIA expects solar generation by U.S. power plants to grow by 27% in 2022 and by 26% in 2023.