According to a new report from Pennsylvania’s Independent Fiscal Office (IFO), the state bested gas production states when it came to growth last year.
Pennsylvania recorded 7.9 percent growth through November of last year, the strongest year-over-year growth of the top five gas-producing states, the report said. While Texas still collected the most natural gas (9,557 billion cubic feet), Pennsylvania ranked second with 7,013 billion cubic feet – down from production in 2020 but up from the amount collected in 2019.
On the county level, Bradford County saw the biggest growth in production at 21.8 percent, while Susquehanna County saw the biggest production volume with 1,619 billion cubic feet. However, Susquehanna County did see a -1 percent growth by volume.
The report also showed that companies drilled more than 500 new wells last year. The IFO said the 42 new wells in 2021 is the first year-over-year annual increase in new wells since 2017. During the last three months of 2021, the state gained 154 new wells – a 55.6 percent increase over the same period in the prior year.
The report also noted that gas production by means of fracking grew faster in 2020 but not as fast as it grew prior to the pandemic. Natural gas from fracking grew 6.8 percent in 2021, 4 percent higher than in 2020. The rate is still lower than the average growth rate of 10.2 percent seen from 2016 to 2019.
According to the report, the growth is due to unusually high gas prices in the second half of the year. Natural gas prices in Pennsylvania rose 186 percent during the fourth quarter of 2021, compared to 2020, and reached an average of $3.97 per million British thermal units. (MMBtu).
The report said the growth was due, in part, to increased pricing for natural gas.
The federal Energy Information Administration anticipates gas production rising nationally this year and into 2023. The IFO said prices have increased nationally and regionally.
“These data show that the Henry Hub price increased by 91.7 percent from the same period in 2020, and the average Pennsylvania hub price increased by 186.0 percent,” the report said. “These prices recorded significant gains due to the combination of weaker-than-usual production growth and demand rebounding from closures and mitigation efforts related to the COVID-19 pandemic in 2020. Current forecasts project that prices will remain elevated in the near-term due to global supply and demand pressures.”