Business report

Pennsylvania records fastest growth in natural gas production, report says

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According to a new report from Pennsylvania’s Independent Fiscal Office (IFO), the state beat gas-producing states on growth last year.

Pennsylvania posted 7.9% growth through November last year, the strongest year-over-year growth of the top five gas-producing states, according to the report. While Texas still collected the most natural gas (9,557 billion cubic feet), Pennsylvania ranked second with 7,013 billion cubic feet – down from 2020 production but up from quantity collected in 2019.

At the county level, Bradford County saw the highest production growth at 21.8%, while Susquehanna County had the highest production volume at 1.619 billion cubic feet. However, Susquehanna County saw -1% volume growth.

The report also showed that the companies drilled more than 500 new wells last year. The IFO said the 42 new wells in 2021 is the first annual increase in new wells since 2017. In the last three months of 2021, the state gained 154 new wells, a 55.6% increase from compared to the same period in the previous year.

The report also notes that fracking gas production grew faster in 2020, but not as fast as before the pandemic. Natural gas from fracking grew by 6.8% in 2021, 4% more than in 2020. The rate is still lower than the average growth rate of 10.2% seen from 2016 to 2019.

According to the report, the growth was due to unusually high gas prices in the second half of the year. Natural gas prices in Pennsylvania increased 186% in the fourth quarter of 2021, compared to 2020, and averaged $3.97 per million British thermal units. (MMBtu).

The report says the growth is due, in part, to higher natural gas prices.

The federal Energy Information Administration predicts increased gas production nationwide this year and through 2023. The IFO said prices have risen nationally and regionally.

“These data show that the Henry Hub price increased 91.7% over the same period in 2020, and the average Pennsylvania hub price increased 186.0%,” the report said. “These prices recorded significant gains due to the combination of weaker than usual production growth and the rebound in demand following the closures and mitigation efforts related to the COVID-19 pandemic in 2020. Current forecasts call for prices to remain high in the near term due to global supply and demand pressures.