The golden age of natural gas production is on the horizon, yet to come, but an awesome sight already, with U.S. natural gas reserves up an incredible 36%.
The Energy Information Administration recently released its reserves report, noting that proven reserves of natural gas increased 36 percent to 464.3 trillion cubic feet—a record that surpasses the previous high set in 2014. Natural gas production in 2017 increased by almost 3 percent from 2016 production levels—another record high. Most of this natural gas is coming from the Marcellus and Utica shale plays in Pennsylvania and neighboring states. Over a decade ago, companies began combining horizontal drilling techniques with hydraulic fracturing to unlock natural gas from shale rock.
The Permian Basin, however, is also a major player in natural gas production, as the Department of the Interior recently found the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin of Texas and New Mexico’s Permian Basin to contain 281 trillion cubic feet of natural gas, or about 48 billion barrels of oil equivalency. However, that production is hampered by pipeline constraints to get the gas to demand centers. Benchmark gas prices in Permian gas markets recently averaged only $0.625 per million Btu because new pipeline capacity is at least 10 months away.