Natural Gas Distribution in the US Industry Market Research Report Now Available from IBISWorld

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Demand from most downstream customers declined during the recession; however, electricity generators and industrial production firms kept the Natural Gas Distribution industry from experiencing more significant revenue declines. Energy needs will rise over the next five years, helping sustain industry demand. Furthermore, renewed demand from downstream markets will support revenue growth. In particular, industrial production firms and electricity generators will provide the industry with large increases in business. For these reasons, industry research firm IBISWorld has added a report on the Natural Gas Distribution industry to its growing industry report collection.

IBISWorld Market Research

IBISWorld Market Research

Energy needs will increase and downstream demand will pick up, aiding industry growth

The Natural Gas Distribution industry has been leaking during the past five years. Drops in demand from downstream customers have been responsible for most of the decline. First, the recession caused households and businesses to reduce spending, in turn, causing energy costs per customer to decline. Furthermore, recent discoveries of natural gas in the Appalachian Basin have kept natural gas prices down in light of the high future supply that is anticipated, says IBISWorld industry analyst Antonio Danova. Also, state utility regulators prevented many distributors from increasing customer pricing because the cost of delivering natural gas has declined over the five years to 2012. As a result of these adverse conditions, industry revenue is expected to decrease at an average annual rate of 2.2% to $127.6 billion in the five years to 2012.

Despite declining demand from most downstream customers, electricity generators and industrial production firms have kept the Natural Gas Distribution industry from experiencing more significant revenue declines. As the recession and discovery of natural gas in Appalachia lowered natural gas prices, electricity-generation firms used natural gas as an input at an accelerating rate, Danova says. Additionally, industrial producers were still active during the recession, supplying goods to emerging economies. While these firms used less energy because of declining domestic demand, emerging economies' demand kept these customers in business and using energy to produce goods. As electricity-generation firms and industrial producers desired increasing volumes of natural gas during the past year, industry revenue is expected to grow at an estimated rate of 4.6% from 2011 to 2012.

Keeping with the current growth trend, the next five years are set to be bright for the industry. As the economy gains steam, energy needs will rise and downstream customers will purchase natural gas at increasing rates. In particular, industrial production firms and electricity generators will provide the industry with large increases in business, as demand for electricity and industrial products grows significantly. Also, increased carbon dioxide (CO2) regulation is expected in the United States, which will push electricity generation away from coal and toward natural gas because it uses half the CO2. For more information, visit IBISWorld’s Natural Gas Distribution in the US industry report page.

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IBISWorld industry Report Key Topics

Most industry firms operate gas-distribution systems consisting primarily of gas mains and meters that transport gas to end consumers. Some firms are gas marketers that buy gas from the well and sell it to a distribution system, while others are gas brokers or agents that arrange for gas to be sold via distribution systems that others operate.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
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