Natural Gas Price Forecast: Abundant supplies, low cost for now

Enbridge gaslines

In preparation for the Northwest Power and Conservation Council's 2021 regional power plan, Senior Economic Analyst Steven Simmons, presented analysis on the price forecast for natural gas to the power committee. The price forecast for natural gas is a strong indicator of electricity prices and resource developments, and is therefore a key input in the Council's modeling.

According to Simmons, natural gas prices for the next three to five years are expected to remain low, thanks to an abundant supply from diverse sources. The long-term forecast is less certain. The low prices should keep natural gas consumption high, especially in the power sector, undercutting coal as retirements continue across the West. Rapid growth in the export liquefied natural gas market is also forecast to continue as more facilities come online in the Southeastern U.S. and possibly in British Columbia. The U.S. is the largest overall producer of natural gas in the world, and is now the third largest LNG exporter behind Australia and Qatar.