Report by Oklahoma City-Based Consulting Company: Decline in Natural Gas Usage Due to More Than Rocky Economy

Article excerpt

Attention, natural gas producers: It's not just the recession's fault.

That decline in the amount of natural gas used by industry that you're worried about - well, there's more to it than just a rocky economy. At least, that's the theme of a study released by an Oklahoma City-based consulting company.

According to a new report written by Don Murry and Zhen Zhu, economists for the Oklahoma City-based C.H. Guernsey Co., the decline in industrial natural gas consumption can be partly associated with long-term trends in energy efficiency and new structural changes to the economy - and not solely related to the effects of the recession.

Murry and Zhu's study said if the price of natural gas had not declined by nearly 50 percent since January 2008, the country's industrial natural gas consumption probably would have declined by more than 19 percent.

The study was based on month-to-month data from the Energy Information Administration and covered a period from January 2008 to June 2009.

Murry said he was surprised by some of the data.

"The statistics are compelling," Murry said. "There is a general trend in industrial usage that's negative, and very pervasive."

Murry said the study found that only 73 billion cubic feet out of a consumption decline of 80.4 billion cubic feet per month was a direct effect of the decline in economic activity. He said that rate is the rate at which natural gas industrial sales are likely to expand even with a strong economic recovery. …