US natural gas production forecast
According to the EIA (U.S. Energy Information Administration), US dry natural gas production is expected to increase through 2050 across various alternative assumptions (see graph below).
Dry natural gas is marketed production minus extraction losses, including the extraction of gas plant liquids such as ethane, propane, butane, isobutane, and gasoline.
Based on current laws and regulations, dry natural gas production is expected to grow 59% from 73.6 Bcf/d (billion cubic feet per day) in 2017 to 118 Bcf/d in 2050. In the high oil and gas resource and technology scenario with lower production costs, natural gas production is expected to grow to 151 Bcf/d in 2050, which is more than double the 2017 rate. In the low oil and gas resource and technology scenario, production is expected to stay mostly flat due to higher production costs.
According to the EIA, near-term production growth will be supported by a growing demand in a low, stable natural gas price environment in both domestic and international markets.
Production growth in the Marcellus and Utica shales
Most of the projected production growth is expected to come from the Marcellus and Utica shales in the Appalachian region. Associated natural gas from the Permian region in Texas and New Mexico is also projected to be a significant contributor.
Key players in the Marcellus shale include Cabot Oil & Gas (COG) and Range Resources (RRC), while Chesapeake Energy (CHK) is a key player in the Utica. Key Permian players include Apache (APA) and Concho Resources (CXO).
Cabot’s production in the first quarter was 169.6 Bcfe (billion cubic feet equivalent), of which 97% was comprised of natural gas. Range Resources’ net production for the first quarter was 2.188 Bcfe, 67% of which was made up of natural gas. CHK’s first-quarter production was 554 Mboe/d (thousand barrels of oil equivalent per day), and natural gas was 74% of the total production.
The United States has been the world’s top producer of natural gas since 2009 when its natural gas production surpassed Russia’s. Growth came increasingly from the Appalachian Basin, namely the Marcellus and Utica shales.
In the next part of this series, we’ll look at production trends in the Appalachian Basin.