Pennsylvania catching up with Texas natural gas production

Pennsylvania’s natural gas production is closer than ever to the top-producing state in the country, according to a new state report.

Pennsylvania was within 1,000 billion cubic feet of Texas’ natural gas production levels through the second quarter of 2021, according to the Pennsylvania Independent Fiscal Office’s quarterly natural gas production report. This is the closest Pennsylvania has ever been to Texas’s production levels.

Pennsylvania produced 3,150 bcf through May 2021; Texas produced 4,118 bcf in that time period. Last year the second quarter report showed Pennsylvania producing 3,002 bcf through May and Texas producing 4,386 bcf.

In 2020, Pennsylvania produced 7,290 bcf for the entire year, and Texas produced 10,291 bcf.

“Pennsylvania is right on the heels of Texas, the nation’s top natural gas producer, because the fundamentals of the Marcellus and Utica shale plays are strong, pipeline capacity has improved, and producers and midstream operators continue to make efficiency gains,” said Dave Callahan, president of the Marcellus Shale Coalition, in a statement.

Through May 2021, the state reports shows that Pennsylvania had the strongest year-over-year growth of any of the top five gas-producing states. It tracks with the state’s continuous strong growth in production over the past decade.

Pennsylvania jumped into the number two spot in annual natural gas production in 2013, once the Marcellus Shale production allowed it to catch up with and surpass Alaska and Louisiana’s production levels. Ever since then, production levels have only climbed. Pennsylvania production made up about 18.7% of nationwide production through May.

Why is this happening?

This could be because of a drop in associated natural gas production, which is natural gas produced from oil wells. 

For Texas, also the national leader in crude oil production, associated gas production played a big role in the state’s growth in natural gas production. Associated gas accounts for about half the natural gas production in the Permian Basin, which covers parts of western Texas and eastern New Mexico.

The share of natural gas production that came from associated gas grew at a rapid pace from 2016 to 2019 due to high levels of new crude oil production, according to U.S. Energy Information Administration data. In 2019, it made up about 12% of total U.S. natural gas production.

Both crude oil and associated gas production fell in 2020, in response to the COVID-19 pandemic. Associated gas production in the Permian grew slightly in 2020, but production in Texas’ Eagle Rock basin decreased in 2020, according to recently released U.S. Energy Information Administration data.

Is this going to last?

The U.S. Energy Information Administration expects oil and natural gas production to remain flat in 2021, as uncertainty from the COVID-19 pandemic continues. Reported oil production in Texas is lower so far this year than it was in 2020.

Since such a good chunk of Texas’ natural gas production comes from associated gas from oil wells, and since Pennsylvania’s natural gas production is not reliant at all on oil production, there could be a real opportunity for the Keystone State to catch up with the country’s ruling oil and gas state. Time will tell. 

According to the Marcellus Shale Coalition’s Callahan, Pennsylvania catching up to Texas isn’t just about flagging oil production. There’s a lot more at play.

“Our ability to advance to the nation’s top production spot  and realize all associated economic and environmental benefits — hinges on commonsense state and federal policies that attract private investment, modernize pipeline infrastructure to reach markets near and far, alleviate basin-wide price discounts, and encourage broad regional and global natural gas use,” Callahan said.