Annual U.S. Natural Gas Production Declines for First Time in 11 Years; December Output Slides as Well, IHS Markit Says

Natural gas production in 2016 ends with its first annual decline since the start of the shale revolution, while December natural gas production retreats


January 6, 2017

HOUSTON (Jan. 6, 2017) – The 2016 annual gas production average for the U.S. lower-48 states fell for the first time in 11 years—since the shale revolution began—according to analysis from IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

IHS Markit said U.S. natural gas production averaged 72.1 billion cubic feet per day (Bcf/d) in 2016, which reflects a 1.8 percent (1.3 Bcf/d) decrease from 2015 averages.

“Despite an increase in U.S. drilling rigs operating in the second half of 2016, a rebound in energy prices and improvements in drilling efficiencies, natural gas production in the remainder of the lower-48 combined for a 6.6 percent (3.5 Bcf/d) year-on-year decrease,” said Warren Waite, manager for analytics at PointLogic Energy, a business unit of IHS Markit. PointLogic Energy tracks U.S. production levels on a daily basis across 92 producing areas in the lower-48 states.

Since March 2016, monthly U.S. natural gas production output has lagged the same month of the prior year, which contributed for the first year-on-year annual decline since 2005.

The Northeast region was the only region to measure year-on-year gains, growing 2.2 Bcf/d to average 22.0 Bcf/d in 2016. Northeast production growth is a result of a similar volumetric build-up of new takeaway capacity on pipelines leaving the Marcellus and Utica shales, IHS Markit said.

“Excluding the Marcellus and Utica in the Northeast, the only other bright spot for gas production growth in 2016 was in the Permian, which added 0.3 Bcf/d of associated natural gas to average 5.6 Bcf/d,” Waite said. The Permian, in West Texas, is a dynamic oil-driven play with highly attractive drilling economics and multiple geological targets that benefit from horizontal drilling.

From a monthly perspective, December production for the lower-48 states also declined, albeit slightly, averaging nearly 71.3 Bcf/d, which reflects a decrease of 0.6 percent (0.4 Bcf/d) below the average in November.

“Natural gas production in December was hindered by a series of arctic blasts in the week leading up to Christmas, and spurred a short bout of wellhead freeze-offs in the Western, Rocky Mountain, Texas and Midcontinent regions,” Waite said. “Production output has since recovered.”

Northeast natural gas production gained 0.25 Bcf/d to 22.5 Bcf/d in December. “The monthly production increase is a result of incremental localized demand met by trapped supply in the Appalachia, plus the partial in-service of Tallgrass’s Rockies Express Zone 3 Capacity Enhancement pipeline project,” Waite said.

PointLogic Energy derives real-time natural gas production data from publicly available interstate pipeline flow data in the lower-48 United States. The energy division at IHS Markit provides market insight and analytics for North American power, gas, coal and renewables.  

To speak with Warren Waite, or for more information on PointLogic Energy or IHS Markit natural gas data and analytics, please contact Melissa Manning at melissa.manning@ihsmarkit.com.  


About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

PointLogic Energy delivers trusted energy market fundamental data and analysis to participants in the oil and natural gas sectors. For more information on its dynamic online tools, in-depth market coverage, and trend analysis please visit www.pointlogicenergy.com.


Contact:
All Industries
IHS Media Relations, +1 303 305 8021
press@ihs.com
or
Chemicals; Energy; Natural Resources
Melissa Manning, +1 832 458 3840
melissa.manning@ihsmarkit.com

 

 

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