Natural Gas Now A Byproduct Of Oil Drilling; Output To Climb As Long As Oil Prices Stay High

November 11, 2013

A decline in targeted natural gas drilling doesn’t translate into a decline in natural gas production.

 

NatGas Performance

 

More than 50 percent of the wells drilled in the U.S. produce both oil and natural gas, according to the Energy Information Administration. That’s up from years prior, when wells targeting natural gas specifically were the majority.

Since the collapse in gas prices, producers have focused their drilling efforts toward oil, but the number of wells that only produce oil hasn’t grown much. Instead, the new shale plays typically result in a combination of oil and gas, which helps explain why natural gas production continues to hit new record highs despite the sharp reduction in natural gas-targeted drilling activity.

Natural gas has essentially become a byproduct of oil drilling, and production of the fuel will likely continue to trend higher as long as oil prices remain high.

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