Overview of U.S. Natural Gas Market

OVERVIEW OF U.S. NATURAL GAS MARKET NATURAL GAS PRODUCTION QUANTITY AND SOURCES PRODUCTION & QUANTITY 2009 26,056,893 MILLION CUBIC FEET 2013 30,005,254 MILLION CUBIC FEET Domestic natural gas production rose 15% from 2009 to 2013. PRODUCTION BY SOURCE 2009 55% 2013 Gas Wells 37% Gas Wells Oil Wells 22% Oil Wells 18% Coalbed Well 8% Coalbed Wel| 5% Shale Gas Wells 15% Shale Gas Wells 40% Production from shale gas wells dramatically increased between 2009 and 2013 largely due to advances in recovery technologies like hydraulic fracturing (fracking). Shale gas is now the primary source of natural gas production. NATURAL GAS CONSUMPTION BY SEGMENT CONSUMPTION BY SEGMENT Electricity Generation 34% Industrial 31% Residential 21% Commercial 14% Transportation <1% Electric power generation is the primary consumer of natural gas. Natural gas is also used in a number of industrial manufacturing processes such as heating and drying as well as a feedstock for pharmaceuticals and fertilizer. NATURAL GAS AVERAGE U.S. CONSUMPTION BY END-USE RESIDENTIAL GAS CONSUMPTION 57% O Space Heating 6 Water Heating 23% 6 Cooking 6 Clothes Drying 5% 5% A Fireplaces 10% Space heating varies greatly due to climate. The New York- New Jersey- Pennsylvania region has the highest space heating usage (85,242 million Btu) while the Texas-Oklahoma-Arkansas-Louisiana region uses the least amount of natural gas for heating (33,891 million Btu). COMMERCIAL GAS CONSUMPTION Space Heating 50% h Space Cooling o Water Heating 1% 13% A Cooking 6% Other 30% Commercial natural gas end-uses are more diverse than those in the residential sector. Natural gas may be used in commercial building combined heat and power systems and as a fuel in onsite power generation. NATURAL GAS CONSUMPTION PROJECTIONS HISTORICAL AND PROJECTED CONSUMPTION (TRILLION CUBIC FEET) 2000 23.33 YEAR 2005 22.01 2010 24.13 2015 25.38 2020 25.52 2025 25.20 2030 25.87 2035 26.48 CONSUMPTION U.S. natural gas production increased by almost 4 trillion cubic feet per year between 2009 and 2013. Consumption is only expected to increase by 2.35 trillion cubic feet per year between 2010 and 2035. Advances in production outpacing increases in consumption will put downward pressure on domestic prices and create additional opportunities for export. ElectricityMatch Reference Site: www.naturalgas.org www.eia.gov/forecasts/aeo/ www.buildingsdatabook.eren.doe.gov Our website: www.electricitymatch.com