U.S. Natural Gas Production Breaks Two All-Time Records in 2017
A new U.S. Energy Information Administration (EIA) report released this week shows that U.S. natural gas production reached all-time record levels in 2017 based on two of the three measures EIA uses to gauge production.
According to the EIA’s latest data, gross withdrawals of natural gas were 90.9 billion cubic feet per day (Bcf/d) last year, breaking the previous record of 90.2 Bcf/d set in 2015. The EIA defines gross withdrawals as follows:
“Full well stream volume from both oil and gas wells, including all natural gas plant liquids and nonhydrocarbon gases after oil, lease condensate, and water have been removed. Also includes production delivered as royalty payments and production used as fuel on the lease.”
“Marketed production reflects gross withdrawals minus natural gas used for repressuring reservoirs, quantities vented or flared, and nonhydrocarbon gases removed in treating or processing operations.”
EIA notes that this record production was spearheaded by a 1 Bcf/d year-over-year increase in Louisiana production and continued surging Marcellus and Utica shale output in the Appalachian Basin. As the following EIA chart illustrates, the Appalachian Basin — including Pennsylvania, Ohio and West Virginia — not only retained its title as the nation’s most prolific natural gas producing region, its gross withdrawals increased from 22.2 Bcf/d in 2016 to 24.3 Bcf/d in 2017.
EIA reports that Ohio enjoyed the largest state-level percentage increase in natural gas withdrawals in 2017, increasing 24 percent to 4.9 Bcf/d. This prolific production is just one reason a recent report argued the Appalachian Basin is the most profitable region for petrochemical investments.
Of course, this incredible production growth is attributable to the advances in horizontal drilling and hydraulic fracturing technology that launched the shale gas revolution roughly a decade ago. U.S. dry natural gas production has increased 44 percent since 2008, and more than two-thirds of U.S. natural gas production is now attributable to fracking.
Even more remarkably, the shale gas revolution appears to be only in the second or third inning, as both the EIA and International Energy Agency (IEA) project U.S. production will increase dramatically over the next four years.
EIA forecasts dry natural gas production will average 81.1 Bcf/d in 2018, establishing a new record, before rising another 1.7 Bcf/d from that level in 2019. The IEA predicts that the U.S. will account for 40 percent of global natural gas production growth by 2022.
The EIA also projects U.S. natural gas exports to continue surging in coming years after natural gas exports grew 36 percent in 2017 and LNG exports quadrupled, allowing the United States to became a net natural gas exporter in 2017 for the first time in nearly 60 years.
The EIA believes that growing natural gas exports will be coupled with increasing domestic consumption as well. From the report:
“Growing U.S. natural gas production is expected to support both growing domestic consumption and increasing natural gas exports in the forecast. EIA forecasts U.S. consumption of natural gas to increase by 4.2 Bcf/d (5.7%) in 2018 and by 0.7 Bcf/d (0.9%) in 2019, with electric power generation the leading contributor to this increase. EIA also expects net natural gas exports to increase from 0.4 Bcf/d in 2017 to an annual average of 2.2 Bcf/d in 2018 and 4.4 Bcf/d in 2019.”
These developments are simply remarkable considering media outlets such as TIME magazine were publishing stories headlined “Why U.S. Is Running Out of Gas” as recently as 2003, while the Post Carbon Institute’s David Hughes and other “peak gas” pundits were making the following claims as recently as 2006:
“Only about four percent of the world’s reported gas reserves are in North America. If you look at world natural gas to production ratios, how long they will last at current production rates, we can see that North America has about 10 years.”
Flash forward 12 years from when Hughes made that claim, and the U.S. not only has not run out of natural gas, it has more of the clean-burning resource than it has at any time in its history — all thanks to fracking.