ENERGY MARKET OVERVIEW AND OUTLOOK

Constellation Energy is a national distributor of gas and electricity. An overview of the natural gas and electric markets from 1991 to 2005 is presented. Historical data on natural gas and electrical energy usage and supply are illustrated. The demand for natural gas in the USA is increasing about 2% to 4% annually while production has increased at 0% to 2% annually. The gap is being filled by imports from Canada as natural gas and liquefied natural gas (LNG) from offshore. The number of wells producing gas in the USA has not kept pace with the output of wells which is declining. Electrical energy demand is increasing for industrial, commercial and residential users. Higher prices for fossil fuels (gas, coal, oil) are inevitable. Energy reliability is emerging as a key concern. This is stimulating new interest in nuclear energy generation and renewable energy sources. In the near and mid-term there will be upward pressure on all energy prices domestically and globally.