American Gas - July 2013 - (Page 14)

BY the nuMBeRs After several years of declining revenue, the natural gas industry is poised for growth. According to new data from iBisWorld, several factors are driving that recovery. U.S. NATURAL GAS DISTRIBUTION INDUSTRY SNAPSHOT Although the U.S. natural gas distribution industry lost revenue during the past five years, it should turn the corner this year and see 5.7 percent annual growth through 2018, according to a report from research firm IBISWorld. U.S. NATURAL GAS DISTRIBUTION INDUSTRY MARKET SEGMENTATION 1% ELECTRICITY GENERATORS 7% COMMERCIAL USERS 30% 14% 2013 Revenue $136.8 billion 2013 Profits 21% $18.5 billion Annual Growth 2008 -2013 OTHER PLANTS AND PIPELINES 27% INDUSTRIAL USERS HOUSEHOLDS -- 4.1% Annual Growth (projected) 2013- 2018 5.7% EXPANSION AND GROWTH ARE NOW THE BYWORDS OF THE INDUSTRY. PRODUCTION HELPS FUEL UPTICK INDUSTRIAL PRODUCTION INDEX 8 % change 4 0 DISTRIBUTED IMPORTS AND EXPORTS The industry also transports imported and exported gas. About 3.75 trillion cubic feet of imported and 1.14 trillion cubic feet of exported gas moved through U.S. distribution pipelines in 2011, the latest year for which data is available. The movement of exported gas should grow over the next five years as more U.S. gas is sold abroad. LARGEST EXPORTER -4 Exported Gas 1.14 tcf -8 -12 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 80% Canada ‘18 INDUSTRY REVENUE LARGEST IMPORTERS 30 Imported Gas 3.75 tcf 15 % change Industry revenue shrank at an annual rate of 4.1 percent between 2008 and 2013, IBISworld reports. The causes were threefold: decreased demand in a soft economy; lower gas prices from expanded supply; and limits on distribution price hikes by state regulators. But revenue is expected to grow 5.5 percent this year. The upward trend should continue over the next five years, with average annual growth pegged at 5.7 percent. Increases in four areas will drive the uptick: world gas prices, industrial production, electric power consumption, and housing starts. By 2018, industry revenue should reach $180.2 billion. The industry supplies gas primarily to power generators, industrial users, households, and commercial users. The household and commercial-user segments have contracted with slow consumer spending and construction activity. The generator and industrial-user segments have expanded, and growth is expected to continue as companies take advantage of inexpensive gas. 60% Canada 0 -15 36 % -30 ‘05 Source: IBISWorld 14 AmericAn GAs JULY 2013 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17 ‘19 ALex ReARdon Mexico -45

Table of Contents for the Digital Edition of American Gas - July 2013

American Gas - July 2013
Contents
President’s Message
Subject Index
Shining a Light for Gas Efficiency
Digest
Issues
Issues
Update
Need to Know
By the Numbers
Places
Scratch, Sniff—Evacuate?
Capitol Hill
Cape Canaveral
The Corner Office
AGA Ops Conference
Elm Street
Work in Progress
Profile
For Good Measure
Law
Jobs
Marketplace
Buyer’s Guide
Headway

American Gas - July 2013