U.S. Natural Gas Production and Imports
U.S. Natural Gas Production and Imports.Total marketed natural gas production grew strongly throughout 2010 (4.4 percent), increasing from 59.7 Bcf/d in January to an estimated 63.7 Bcf/d in December. Year-over-year growth in 2011 is expected to slow considerably to just 0.8 percent as an increase of 1.0 Bcf/d in the lower-48 states is partially offset by a decline of 0.4 Bcf/d in the GOM.
The latest EIA data for monthly natural gas production in the Natural Gas Monthly, showed an increase in lower-48 states’ production for November 2010, reversing October’s decline. Modest declines are expected to resume and continue through 2011, however, because of a falling drilling rig count in response to lower prices. The number of rigs drilling for natural gas reported by Baker Hughes Inc. increased from a low of 665 in July 2009 to 973 in April 2010. Over the following 6 months the natural gas rig count stayed relatively unchanged. However, over the last 3 months the rig count has fallen, dropping to 911 rigs as of February 4. The large price difference between petroleum liquids and natural gas on an energy-equivalent basis contributes to an expected shift towards drilling for liquids rather than for dry gas.
Increasing consumption, especially in the electric power sector, contributes to higher prices and more economic incentive for producers to resume drilling. Total domestic natural gas production increases 1.1 percent in 2012. Lower-48 production is expected to increase throughout 2012 from 55.0 Bcf/d in January to 57.4 Bcf/d in December, which would be strong growth, but significantly less than during 2010. Federal GOM production declines slightly, by 0.4 percent (0.02 Bcf/d) in 2012.
EIA expects gross pipeline imports of 8.7 Bcf/d in 2011 and 8.2 Bcf/d in 2012, year-over-year decreases of 4.2 and 5.5 percent, respectively. Projected imports of liquefied natural gas (LNG) average 1.1 Bcf/d in 2011, a 4.4-percent decrease from 2010 levels. LNG imports in 2012 grow modestly to 1.2 Bcf/d. High domestic production, high inventories, and low U.S. prices relative to European and Asian markets should continue to discourage LNG imports.
