Pic-of-the-Week: Like Crude, U.S. Natural Gas Gains are Highly Concentrated (06/02/2014)

Natural Gas Production Gains Since 2005 are Highly Concentrated in Only a Few States – U.S. natural gas production has increased by nearly 50% since 2005, from about 18 trillion cubic feet to nearly 27 trillion cubic feet annually.
Domestic crude oil production is similarly up about 50% since 2009.

Texas remains the largest player, with production up 50% the past decade and now the source of a little over one-fourth of total U.S. output. The increase in Texas nearly mirrors the decline seen in production from the Gulf of Mexico, where output is off more than 50% the past decade.

Among the other producing states, Pennsylvania is the unquestioned standout, where production is up more than ten-fold from about 350 billion cubic feet to more than 3.5 trillion cubic feet in only four years. Pennsylvania is now the number two producer of natural gas and is truly the North Dakota on the gas side of the business.

And although Louisiana has dialed back production the past two years in response to low natural gas prices, production remains up more than 60% since 2008, and the state will almost certainly reemerge as a key producer once prices rise enough to justify the high cost of drilling in the Haynesville shale.

Among the other major producing states, Colorado and Oklahoma have enjoyed a roughly 50% gain in production the past decade. Production in Wyoming is off about 25% since 2008, but remains up slightly the past decade. New Mexico production remains in a slow downtrend and is off more than 20% the past decade. Alaska has similarly shown a steady decline in production.