EIA: Five States Produced 70% of Record U.S. Natural Gas in 2023

Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--In 2023, U.S. producers sent a record 113.1 billion cubic feet per day (Bcf/d) of natural gas to market, according to figures assembled by the U.S. Energy Information Administration (EIA). Seventy percent of that amount came from five states.

Topping the list with 28% of marketed gas was Texas. Next were Pennsylvania (18%), Louisiana (10%), West Virginia (8%) and New Mexico (8%). So far in 2024, overall production has slowed a bit, but the EIA reports that these five have increased their share to 73% of the nation's total.

Texas, which produced a total of 31.6 Bcf/d, a 7% increase from 2022, benefitted from production in its portions of the Permian, Haynesville, and Gulf of Mexico plays.

These figures track only marketed amounts because growing amounts of natural gas never make it to the pipeline. Instead, they are used onsite to generate electricity to power data centers, Bitcoin mining, and by the industry itself for lifting and processing systems. These amounts are difficult to track because there is no central system for collecting that data.

Sorted by plays, the Permian Basin of western Texas and southeastern New Mexico, along with the Haynesville of northwestern Louisiana and east Texas, combined to produce 40% of 2023's U.S. total. Overall, the Permian averaged 8.7 Bcf/d in 2023, up about 18% from the previous year.

Because Permian natural gas is a byproduct of its highly productive oil wells, the basin's production of the former is tied only to oil prices without regard to gas. There, in fact, due to takeaway capacity overloads, natural gas prices at the region's Waha hub were in negative territory several times in 2024.

Toward solving that issue, Energy Transfer LP (NYSE:ET) (Dallas, Texas) has announced final investment decision (FID) on the Hugh Brinson pipeline (formerly Warrior), to be built in two phases. The first, traveling from Waha to Maypearl, Texas, is expected to be operational by fourth-quarter 2026. Its planned capacity is 1.5 Bcf/d. Industrial Info is tracking six projects that are tied to the pipeline. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for the project reports.

Another new gas outlet is the Matterhorn, running from Waha to Katy, Texas. The pipeline has a design capacity of 2.5 Bcf/d, and is in the process of ramping up more quickly than originally planned.

Marketed natural gas in Louisiana includes some Haynesville and offshore totals, and reached its highest level since 1996, averaging 11.8 Bcf/d. That's 6% higher than in 2022.

As the U.S. became the world's top liquefied natural gas (LNG) exporter in 2023, much of that export supply comes from the Haynesville because it is a short hop from there to Gulf Coast LNG export facilities, said the EIA report.

In Pennsylvania, natural gas production matched the 2021 record of 20.9 Bcf/d. That's slightly higher than 2022. West Virginia increased by 11% over 2022 numbers, achieving a record 8.9 Bcf/d in 2023. Natural gas in both states comes from the Appalachian Basin, made up of the Marcellus and Utica natural gas plays. That region accounts for 32% of marketed U.S. natural gas production.

Down for 2024
With natural gas prices depressed much of this year, January through August production is up only 1% over 2023 numbers for the same period, averaging 113.0 Bcf/d.

Again, the Permian drove production increases, as its natural gas is driven by oil prices instead of natural gas. Said the EIA, "Production in Texas increased 5% (1.5 Bcf/d), and output in New Mexico increased 12% (1.0 Bcf/d)."

For the 2024 period, Louisiana's marketed production dropped 15%, Pennsylvania's fell by 2%, resulting from record low Henry Hub prices, dropping to "$2.09 per million British thermal units through August 2024," said the report.

Next Year
In its Short-Term Energy Outlook released December 10, the EIA predicted Henry Hub spot prices will rise from November levels of slightly more than $2.00 per million British thermal units (MBtu) to about $3.00 per MBtu by the end of the winter heating season. That number is based on the fact that natural gas storage starts the heating season at a surplus to the five-year average.

The agency expects a slightly cooler winter to raise heating demand over last winter, looking for 6% more heating degree days in 2024-25's heating season.

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