Is Marcellus Production Heading for a Decline? EIA Says Yes

A Reuters story is quoting analysis done by the U.S. Energy Information Administration (our favorite government agency) saying the EIA expects production in the Marcellus to remain flat for the next several years, and then begin a slow decline of 1% or so per year. The EIA prediction is based on the theory that natural gas prices in the Marcellus will remain really low–below $2 per thousand cubic feet (Mcf) through 2016, and the average price won’t hit $4/Mcf until 2020 or later. Private analysts (many of them) disagree and say production will continue to climb over the next several years as new pipelines come online and drillers “uncurtail” production that is idled right now. Who’s right?…

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