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Show decade. This reflects an assumption in the projection of continued efficiency improvements and a declining role in the economy for energy intensive industries. Natural gas continues to playa major role in a highly competitive energy mix well into the next century. Primary natural gas consumption is expected to increase modestly from 17.9 quads in 1984 to 18.7 quads in the year 2000. Thereafter, if advanced technologies for cost-competitive production of gas from low-permeability formations and other cost-competitive unconventional resources become available, gas can continue to maintain this level of consumption through 2010. Industrial gas consumption is projected to increase gradually from 7.4 quads in 1984, reaching 8.2 quads in 1990 and 8.4 quads by 2000. A substantial portion of the projected increase industrial gas consumption also is the result of rapid growth in gas-fired cogeneration. Gas consumption for industrial cogeneration grows from 0.3 quad in 1984 to 1.2 quads in 2000. After the year 2000, the baseline projection indicates that industrial consumption of gas will be dependent upon supply. In the absence of new gas supply supplements that are competitive with low-cost alternative fuels, industrial gas consumption would be supply-constrained to about 6.1 quads in 2010. An alternative supply slate including the expected impact of research to develop improved exploration and development technologies could provide the gas supply necessary to sustain industrial demand at approximately 7.7 quads through 2010. In every end-use sector, the ability of natural gas to retain or increase its market share will depend upon maintenance of a strong and evolving stock of gas utilization technologies. In the residential market, reduced costs for providing gas service to new and retrofit homes and the availability of convenient and efficient gas appliances are central to successful competition. The growing commercial market provides a target for advanced gas cooling technologies and for small pre-engineered gas-fired cogeneration units. In industrial applications, the inherent qualities of gas must be optimized in applications that can contribute to product quality and process efficiency as well as reduced fuel costs. In the 1985 GRI Baseline Projection, GRI developed supply and price projections for 10wer-48 natural gas production with and without the inclusion of an alternative advanced technology assumption for the production of gas from unconventional resources, primarily low permeability or "tight" geologic formations. The advanced technology assumption is defined as 8 including advances due to research which are above and beyond improvements in current exploration and development technologies that are foreseeable and likely to evolve only from greater experience in the field. The introduction of an advanced technology assumption has little effect upon either the supply or the price of gas until after 1990. By 2000, however, the assumption of advanced technology in 10wer-48 production would have a significant effect on both supply and prices. Total 10wer-48 production would be 1 Tcf higher, although advanced technologies would provide 2.5 Tcf. Lower-48 average wellhead and border prices in the advanced technology scenario would be more than thirty cents per MMBtu lower at $4.40 per MMBtu in 1984$. By 2010, total U.S. gas supply in the advanced technology outlook is 1.6 quads higher (18.9 versus 17.3 quads) than that projected in the base technology outlook. The increased supply is accompanied by a decline in the share of U.S. gas supply obtained from relatively high-priced supplemental sources. In the base technology outlook, supplemental sources are projected to provide 42 percent of total U.S. gas supply in 2010. In the advanced technology outlook, supplemental sources provide 34 percent of total U.S. gas supply. Projected average U.S. gas prices in 2010 are reduced 25 percent in the advanced technology outlook. INDUSTRIAL SECTOR DEMAND Historical total industrial energy consumption re.flects the s-evere impact of the oil price shocks and economic recessions. Industrial consumption declined by 3 quads following the 1973 oil price shock and by 6 quads following the 1979 oil price shock and the 1981-82 economic recession. Historical natural gas consumption also reflects the impact of the oil price shocks and recessions. However, when total industrial energy consumption recovered beginning in 1975, industrial natural gas consumption was constrained by the price-induced supply curtailments and remained flat through 1981, then dropped further during the ensuing recessions. Despite an assumption of continuing energy conservation and a further res·tructuring of U. S. industry away from energy-intensive applications, the industrial sector share of total delivered energy is projected to grow from 41 percent in 1984 to 44 percent in 2000. Over the same time frame, the industrial sector share of total delivered gas consumption is projected to grow from 41 percent in 1984 to 44 percent in 2000. |