According to MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), natural gas production in Pennsylvania, Ohio, West Virginia is growing faster than demand. Lately the Marcellus/Utica is producing 42% of all the natural gas produced by the nation’s seven largest shale plays (see EIA Jan ’18 Drilling Report: M-U on Fire, Up 1/3 Billion Cubic Ft). If you add together all natgas production sources (conventional and unconventional), M-U produced 27% of the entire nation’s natgas supplies in 2017–up from 2% in 2008. It is astonishing! But Houston, we have a problem. There still aren’t enough pipelines to carry our gas to other markets, where there is demand. And we in the M-U region don’t have enough of our own demand to keep up with the ever-growing supply. Although populations grow gradually over time, the fact remains the amount of gas used to heat and cool households, and businesses, and the amount of natgas used by industrial customers, remains pretty constant over time. It may grow a little, but not nearly as much as supply is growing, which keeps the price of natgas in our region in the basement. There is a ray of sunshine though. EIA says, “Almost all of the recent growth in natural gas consumption in these [M-U] states has been in the electric power sector.” Our observation/point: the power generation space and the shale drilling space are now bosom buddies–joined at the hip. Electric generation is a critical new market for our gas–about the only new market with the capacity to sop up meaningful portions of our ever-expanding supply…
