Pa. Natural Gas Production Falls in 2022 for First Time

For the first time in a decade, annual natural gas production in Pennsylvania from the Marcellus and Utica shales declined.

A recent report from the state Independent Fiscal Office showed that natural gas production from unconventional wells declined 1.6 percent in 2022 from the previous year. It’s the first annual drop since the state began keeping production records in 2012.

Data from the state Department of Environmental Protection shows that output from horizontal wells also declined by 5.1 percent in the fourth quarter of 2022. Production for the full year was 7,439 billion cubic feet (bcf), down from 7,627 bcf in 2021.

While lower, Pennsylvania remained the second-largest natural gas-producing state in the U.S., trailing only Texas. West Virginia is the fifth-leading state in natural gas production, and its production grew by 3.9 percent, after falling during 2020 and 2021 during the pandemic.

Washington County maintained its position as the No. 2 gas-producing county, behind Susquehanna County, with 17.8 percent of the state’s production. However, Washington County’s production fell by 5.1 percent, even as the number of producing wells increased 2.5 percent, to 1,866. Greene County remained fourth in the state with 14.6 percent of production, which but also saw a 0.3 percent decline, while the number of wells increased to 1,282, a 4.2 percent increase.

While there was an 11.7 percent decrease in the number of new wells spud in the fourth quarter of 2022 compared to 2021, the IFO said that for all of 2022, new wells drilled totaled 574, an increase of 56, or 10.8 percent from the previous year and the second consecutive year there was an increase. Natural gas drilling production saw a dramatic slowdown in 2020 and 2021 due to COVID lockdowns and decreased demand.

While the IFO report did not provide any possible reasons for the decrease in production, natural gas drillers have been keeping capital spending in check and production at maintenance levels in order to improve their bottom line, and because they are hesitant to invest in increased production only to see another bust in natural gas prices.

While prices escalated dramatically after the Russian invasion of Ukraine in early 2022, they have declined recently “largely due to mild winter weather which constrained the typical demand for heating and led to increased natural gas inventory throughout the country,” the IFO report said. “There is typically a draw-down of inventories during the winter months to fulfill heating demand.”