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U.S. NatGas Production Grew by 4% in 2023; M-U Grew 3% – 1.2 Bcf/d
According to the data geeks at the U.S. Energy Information Administration (EIA), U.S. natural gas production grew by 4% in 2023, which was similar to the growth in 2022. U.S. gas production in 2023 averaged a whopping 125.0 Bcf/d (billion cubic feet per day). In 2023, more natural gas was produced in the Appalachia (Marcellus/Utica) region of the Northeast than in any other U.S. region, accounting for 29%, or 37.7 Bcf/d, of gross natural gas production. However, production growth in Appalachia slowed because our region doesn’t have enough pipeline takeaway capacity to transport more natural gas out of the region to the markets that would buy it.
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According to Texas Independent Producers and Royalty Owners Association’s (TIPRO) latest State of Energy report, the U.S. oil and gas industry directly employed 2.04 million workers in 2023. That’s a net increase of 56,373 direct jobs compared to 2022. According to the report, the oil and gas industry paid a national average wage of $79,427 in 2023. Workers in Crude Oil Extraction earned the highest annual average wage of all oil and gas industry sectors at $220,863. Want a great job? Work in the O&G industry!
Last week, the Baker Hughes rig count dropped five rigs after adding seven the week before. The count went from 629 active rigs two weeks down to 624 last week. The national count is officially rangebound. Since last October, the national count has gone as low as 616 and as high as 629. And that’s it. No higher and no lower. The Marcellus/Utica cumulatively lost one rig (in Pennsylvania) last week and now runs 42 rigs. The number of gas rigs cumulatively across the country fell to its lowest number since January 2022.
Thanks to abundant, clean Marcellus shale gas, Pennsylvania remained the country’s top electricity exporter in 2023 while simultaneously reaching a new low for carbon dioxide (CO2) emissions from electricity generation, according to the Pennsylvania Independent Fiscal Office’s (IFO) latest analysis. Yes, you read that right. PA is producing more electricity than ever, yet CO2 emissions from electric generation are lower than ever. How can that be?
The latest monthly U.S. Energy Information Administration (EIA) Drilling Productivity Report (DPR) for March, issued yesterday (below), shows EIA believes shale gas production across the seven major plays tracked in the monthly DPR for April will decrease production from the prior month of March. This is the ninth month in a row that EIA has predicted shale gas production will decrease for the combined seven plays. However, it won’t decrease everywhere. Gas-focused plays like the Marcellus/Utica and the Haynesville will see the biggest drop in production. In contrast, the oily Permian play will boost the production of “associated” natural gas — the gas that comes out of the ground along with oil. The Permian is also boosting oil production in April.
Last year, University of Pittsburgh (Pitt) researchers released three studies commissioned by the State Dept. of Health supposedly investigating whether or not there is a connection between shale drilling and childhood diseases, including cancer (see 
Bayou City Energy (BCE), an E&P-focused private equity firm, yesterday published a VERY INTERESTING white paper titled “Natural Gas Producers: Why Don’t You Stay?” (full copy below). The thesis of the white paper (or report) is that drillers in gas-focused plays can’t produce natural gas as cheaply as oil producers who produce gas as a side benefit (called associated gas). Therefore, gas-focused drillers need to drastically, immediately change their capital allocation strategies (spend less on new drilling, for now). The author also makes the case that gas-focused drillers should look for opportunities to merge with a “liquids-rich producer.”
Yesterday, the American Gas Association (AGA) unveiled a new study, “Advancing America’s Pharmaceuticals: The Value of Natural Gas to U.S. Pharmaceutical Manufacturing” (full copy below). Natural gas and other petrochemicals are irreplaceable for manufacturing medicines, with 99% of pharmaceutical feedstocks and reagents derived from natural gas and other petrochemicals. Face masks, disposable gloves, and syringes are also manufactured from petrochemical feedstocks like natural gas and are critical to combatting the spread of disease. Without natural gas, we would all live short, brutish lives. Billions would die.
Plugging and capping old wells has been in the news a lot lately. The left claims old oil and gas wells are partially responsible for toasting Mom Earth. Bunkum (see our companion story today about the EDF/Google satellite). But, let’s be honest, it’s better to cap old wells than to have them belching methane for years and years. Amid the confusion surrounding this issue is a claim that even plugged wells can and do continue to leak significant quantities of methane. A new study from a British university lays that baseless claim to rest.
We report today in a companion story about the crash in the NYMEX price to $1.77/MMBtu that NGI’s Spot Gas National Average jumped 36.5 cents to $2.115 yesterday based on winter weather forecasts in some states. What will the Henry Hub spot price (not the futures price, but the physically traded spot price) average for 2024 and 2025? The number crunchers at EIA (U.S. Energy Information Administration) explain their reasoning for a prediction that the average spot price will remain below $3 this year and next.