Natural gas production surges in Pennsylvania

As natural gas production soars at the Marcellus Shale, Pennsylvania may be the second-biggest gas-producing US state by the end of the year, according to the US Energy Information Administration. 

By then end of this year, Pennsylvania may be the second-biggest gas-producing US state, behind Texas, as production at the Marcellus Shale soars, according to a new report from the Energy Information Administration (EIA).  

For now, Pennsylvania ranks third for gas production in the US, but data for this year is still coming in and the state is clearly the fastest-growing, while Texas remains the all-out leader.

According to the EIA, natural gas production in Pennsylvania grew by 72% from 2011 to 2012, boosting the state from seventh place to third thanks to rapidly increasing production at the Marcellus Shale, which produced 1.4 trillion cubic feet of gas during the first two quarters of this year alone. (Related article: China’s Sinopec Eyes Stake in Canadian LNG Project)

“Pennsylvania also saw the largest volume and percentage increases in marketed gas,” according to the preliminary EIA report, whose final figures for this year will come out in February. “Production in the Marcellus region has grown so substantially that spot prices in the Northeast may continue to drop further below the Henry Hub spot price in the future.” 

While Texas remains by far the largest gas-producing state, with steady growth, including a 5% uptick in production this year, the Marcellus Shale is allowing Pennsylvania to narrow this gap.

The Marcellus Shale formation stretches under Pennsylvania, West Virginia, Ohio and New York, among other states, and its largesse has also afforded West Virginia a spot in the top-ten gas-producing states for the first time. (Related article: Why California will Never Fulfill its Shale Potential)

Currently, the EIA ranks Texas first, followed by Louisiana, Pennsylvania, Oklahoma, Wyoming, Colorado, offshore territory, New Mexico, Arkansas and West Virginia. For 2011 and 2012, only Pennsylvania and West Virginia registered an increase in production, while Wyoming and offshore territories registered a decline and the remainder no significant change.

“A few states experienced drops in production levels between 2011 and 2012. Wyoming, which produces significant volumes of coalbed methane, fell two places in the marketed natural gas production ranking, from number three to number five. Federal offshore production, which includes federal production from both the Gulf of Mexico and the Pacific Ocean (California), also fell in the ranking, from number five to number seven. Federal Gulf of Mexico natural gas production has generally declined since 2001, and federal Pacific offshore production has generally declined since 2002,” the EIA noted.

Original article: http://oilprice.com/Energy/Natural-Gas/Pennsylvania-Races-to-Top-of-Gas-State-Rankings.html