Production of natural gas in the United States will continue to increase gradually as the industry continues to recover from the impact of COVID-19 and in response to additional drilling activity in key basins. Dry natural gas production will increase from 95.1 billion cubic feet per day (Bcf / d) in October to 97.5 Bcf / d in December 2022, according to the latest forecast from the US Energy Information Administration.
The agency’s latest short-term energy outlook predicted U.S. gas production in December 2022 to surpass the previous monthly record of 97.2 Bcf / d set in November 2019.
Gas production in the United States was hit hard in early 2020, when lower demand associated with COVID-19 led to lower prices and lower drilling activity. As a result, monthly natural gas production fell to a low of 87.3 Bcf / d in May 2020. Dry natural gas production in the United States has generally increased since then, with a brief exception in February 2021, when a severe storm in Texas caused abrupt production shortages and price spikes.
The latest production forecast from the EIA indicates that natural gas production in the United States has increased in recent months thanks to additional drilling activity focused on natural gas and additional natural gas production associated with the production of oil. This growth has been evident both in Haynesville, which includes northeastern Texas and Louisiana, and in the Appalachian Basin, which includes Pennsylvania and West Virginia. Associated natural gas production also increased, as producers completed wells that were previously drilled but unfinished (DUC), the EIA reported.
The number of natural gas directed rigs – rigs drilled primarily into formations containing natural gas – declined throughout 2019 and the first half of 2020, according to data from Baker Hughes. By the end of August 2020, the number of rigs powered by natural gas had fallen to 68 rigs, the fewest in Baker Hughes’ data series, which dates back to 1987.
The number of rigs run on natural gas has since increased to 102 by mid-November 2021. The number of rigs is considered a leading indicator of newly drilled wells, but increases the efficiency of drilling (the number of rigs is new wells that each rig can drill) and new wells production of wells has complicated the relationship between the number of rigs and eventual production, the EIA reported.