NGA Issue Brief: Distribution Systems in the Northeast: Continued Strong Demand

  • Natural gas use is rising in the Northeast region.
  • Natural gas has consistent benefits over other fuels: cost, supply, and lower emissions.
  • Natural gas utilities have programs in place to help their customers increase natural gas options-and advice on ways that people and businesses not currently using natural gas can convert their existing systems.
  • Parts of the region face challenges in securing sufficient pipeline capacity given system constraints.

Natural Gas is the Optimum Choice for the Northeast U.S.
Natural gas is the best choice for homeowners and businesses in the Northeast region. It is the leading home heating fuel in the U.S., fueling 48% of homes. In the Northeast, it fuels 55% of homes; some state shares include 75% of New Jersey homes, 61% of New York's, 51% of Pennsylvania's, and 40% of New England's. It is the leading single fuel for electric power generation throughout the region - over 50% of current electric generating capacity.
Why is natural gas use on the rise in the region? Simply put: supply, price and environmental benefits.
This issue brief by the Northeast Gas Association (NGA) outlines some recent market developments on natural gas-and provides insight on how you can gain further information on ways you can access natural gas.

Natural Gas is the Lower Cost Option for Consumers
With the rise in U.S. natural gas production in recent years, the commodity price of natural gas has declined and remained generally stable. In its 2020-21 Winter Fuels Outlook, released in October 2020, the U.S. EIA projected that natural gas would remain the lowest cost option for home heating - in the U.S. and regionally.
In recent years, U.S. production of natural gas has grown robustly, thanks especially to the application of technology to access what was traditionally called "unconventional gas." In September 2019, the Potential Gas Committee at the Colorado School of Mines estimated total U.S. reserves at over 3,300 trillion cubic feet (Tcf) - essentially 100 years of supply at current domestic consumption levels. The strong domestic production means jobs here in the U.S., a positive supply outlook for natural gas, and a stable price outlook according to government and economic forecasters.


This chart from the Potential Gas Committee (PGC) shows the rise in estimates of the total U.S. natural gas supply. In recent years, thanks to the rise in shale gas production (shown in blue/red stripe), the resource outlook has increased considerably. There may be as much as 100+ years of supply for the U.S. market in domestic fields alone. Source: PGC, September 2019.

Environmental Benefits
Within the home or business, natural gas has lower environmental impacts.
Natural gas is the cleanest fossil fuel, with lower air emissions than oil and coal.

Natural gas has been the leading fuel for new power generation, along with renewables, in the U.S. and the region. Air emissions from power plants have declined substantially in the Northeast in the last decade, thanks in large part to the use of natural gas.
Another area receiving renewed attention recently has been the natural gas vehicle (NGV). NGVs remain a very competitive alternative fuel option, especially for certain key markets such as fleets, bus systems, and a range of heavy-duty vehicles, including refuse trucks.

What are the fuels used in home heating in the region?

Regional Demand Continues to Grow; Pipeline Constraints Present Market Challenges in Certain Parts of Region

The benefits of natural gas - lower price, lower emissions, domestic supply, etc. - are leading to continued customer conversions from alternate fuels and new customer development. There are now over 12 million households in the Northeast U.S. that utilize natural gas (and nearly 70 million in the entire U.S.). It is the leading home heating fuel source regionally and nationally. Indeed, in a March 2019 issues brief, U.S. EIA stated: "The residential and commercial sectors [nationwide] are also expected to continue using more natural gas. For instance, EIA projects that natural gas furnaces and boilers will be used in 55% of U.S. homes in 2050, an increase from their 49% share in 2018."

Natural gas utilities in the region continue to see increases in new customers and customer conversions from other fuels, and are seeking to extend service where economically feasible - and where system infrastructure expansion is available. Parts of the Northeast region, including the New York City area and parts of Massachusetts, have moratoria in place on adding new natural gas customers, as demand exceeds available pipeline system supply. Overcoming these challenges and meeting customer demand remain goals of the natural gas distribution companies.

Since 2012, natural gas has added over 1 million new household customers in the Northeast.

For the 9-state Northeast region, natural gas represents nearly 60% of the overall home heating market - over 12 million households served.

For Further Information:

NARUC Task Force Report on "Natural Gas Access and Expansion," Nov. 2017