Demand for natural gas soared to new highs in July, forcing power companies to tap into long-term gas supplies in the summer for the first time in a decade, the federal government said Tuesday.
The bulk of the nation's electricity supply now comes from natural gas, which is causing greater demand for the fossil fuel than ever before from the power sector.
Typically, gas storage is never tapped in July and August. That doesn't happen until November.
But the high temperatures in July pushed up demand for natural gas, driven by the need for residential and commericial cooling, according to the head of the Energy Information Administration, the Energy Department's analysis arm.
EIA chief Adam Sieminski, in a statement on the agency's August energy outlook, said even with a slight bump in natural gas prices, electric utility demand rose to new highs in the summer cooling season.
"Despite the recent rise in natural gas prices, hot weather across the country is leading power plants to pull more natural gas from storage this summer, with the amount of electricity generated by natural gas to meet cooling demand reaching a record high in July," Sieminski said.
"Natural gas inventories were drawn down in the last week in July for the first time in 10 years during the June-August period, when gas stocks normally increase," he added. That might mean drillers in the nation's shale states will be busy making up for the lost supply ahead of the winter heating season, when more natural gas is used.
He said the hot temperatures places the nation on target to see a 3-percent jump in electricity sales this year compared to last.