Dry Gas Window

U.S. Lower 48 natural gas production is averaging a record 74.2 Bcf/d in September to date, according to PointLogic Energy. Meanwhile, CME’s Henry Hub natural gas futures contract has languished at an average of $2.68/MMBtu this month to date, the lowest for any September since 2001. Much of the recent gain in natural gas production has come from  new Utica Shale output.  In today’s blog, we drill down into the region’s pipeline flow data to see where exactly the growth is coming from, what’s driving it and what it could mean for natural gas supply.

<p>Natural gas production is growing faster in the Marcellus and Utica than any other part of North America.</p>

In the past 10 years Marcellus and Utica shale drilling has transformed the U.S. Northeast from a sleepy backwater of gas production into a powerhouse that (according to the Energy Information Administration) supplied 22% of total U.S. gas production in December 2014.  NGL production from the region is already 8% of the U.S. total and likely headed toward 20% by 2020.  These vast shale formations cover most of Pennsylvania, West Virginia and Eastern Ohio, but it turns out that most of the production comes from only 20 or so counties across those three states.  Such geographic concentration has significant implications for regional infrastructure development and capacity. Today we describe where producers have found success in the region.