Industrial demand for natural gas in 1986 fell 618 billion cubic feet
due to competitive oil prices causing industries capable of
switching between fuel sources to do so, the American Gas
However, 308 billion cubic feet of that lost consumption could
be regained at crude oil prices of $22 per barrel, according to the
U.S. natural gas consumption was approximately 16 trillion cubic
feet in 1986, down 8.6 percent from 17.5 trillion cubic feet in
1985, said Carl Ericson, manager of the association's news bureau.
Industries began using boilers capable of fuel switching in the
late 1970s, when federal regulations and the threat of natural gas
shortages forced the industries to have an alternative source of
The association received 38 member-utility companies' responses
to its latest survey on fuel displacement. The companies represent
all regions of the country and have varying sizes of industrial and
electric generation natural gas loads.
At crude oil prices of $22 per barrel, 308 billion cubic feet of
load loss would be regained, the survey forecast. Approximately 291
billion cubic feet of natural gas load would be regained from
residual oil, while 10 billion cubic feet would be regained from
crude oil and other fuels and 7 billion cubic feet would be regained
from distillate oil.
More than half of the natural gas load loss due to fuel
switching, 353 billion cubic feet, was lost to residual fuel oil,
the association reported. Most of this loss, 238 billion cubic
feet, occurred in the industrial market.
Coal coaxed away 123 billion cubic feet of natural gas demand,
wile crude oil and other fuels took 126 billion cubic feet from the
natural gas market.
Distillate oil and propane pulled 11 billion cubic feet and
electricity pulled 5 billion cubic from natural gas demand, the
This year's results show that the majority of switching occurred
at natural gas prices up to 20 percent higher than residual oil.
Similar results were reached in past surveys.
Ted Palmer, an industrial marketing engineer for Oklahoma
Natural Gas Co., said fuel switching to residual fuel oil in this
part of the country is not a problem for the utility.
Since 1975, the only problem has been in specialized markets,
such as the cement business, he said. Most switched to coal, which
can be used in the product. …