Is Wet Gas Following Dry Gas Over a Price Cliff?

price over a cliffSince the beginning of 2012, hardly a quarterly earnings/operations report from an energy company, nor a story about natural prices, has failed to point out how drillers are now focused on “wet gas” areas in shale plays. For the Marcellus and Utica region, that means a shift from drilling in northeast PA to southwest PA, northern WV and eastern Ohio, where wet gas  deposits are found. Wet gas simply means there are extra hydrocarbons that come out of the bore hole along with “dry gas,” i.e. methane. Wet gas hydrocarbons include propane and ethane.

A story in today’s Pittsburgh Post-Gazette chronicles the rapid drop in the commodity price for both propane and ethane because of increasing supplies from shale gas drilling. It feels like the dry gas price story all over again. Too much supply, not enough demand.

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