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U.S. lower 48 natgas output down for second straight month: EIA
March 31, 2017 / 6:48 PM / 7 months ago

U.S. lower 48 natgas output down for second straight month: EIA

(Reuters) - U.S. natural gas output in the lower 48 states declined for a second month in a row to 78.3 billion cubic feet per day (bcfd) in January, the U.S. Energy Information Administration (EIA) said on Friday in its monthly 914 production report.

That compared with 78.7 bcfd in December. Production peaked at 82.6 bcfd in February 2016.

Output declined in two of the three biggest producing states in the lower 48, Texas and Oklahoma, but held at a record high in Pennsylvania.

In Texas, the country’s largest gas-producing state, output declined for a ninth month in a row, down 0.2 percent to 20.6 bcfd in January from December. That was the state’s lowest level of monthly output since February 2011.

Production in Oklahoma declined for a fifth month in a row, down 0.8 percent to 6.4 bcfd in January, its lowest monthly output since June 2014.

In Pennsylvania, output held steady at a record high 14.9 bcfd in January, according to EIA data going back to 2005. That was up 3.2 percent from 14.4 bcfd during the same month a year ago.

Gas production declined in 2016 for the first time since the start of the shale revolution a decade ago as low energy prices reduced drilling activity.

Next-day gas prices at the Henry Hub benchmark in Louisiana averaged $2.49 per million British thermal units in 2016, the lowest annual average since 1999. Prices averaged $2.61 in 2015.

Before 2016, U.S. gas production last dropped in 2005 when Hurricanes Katrina and Rita slammed into the Gulf Coast, damaging energy infrastructure along the Gulf of Mexico, which had been supplying more than 20 percent of the nation’s gas.

Since then, producers have figured out how to use horizontal drilling and hydraulic fracturing technologies to unlock more of the gas trapped in shale rocks.

Today, the seven biggest U.S. shale fields provide more than 60 percent of the nation’s gas production, while the Gulf of Mexico accounts for just almost 5 percent of the total.

Reporting by Scott DiSavino; Editing by Andrew Hay

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