Despite regulatory headwinds out of Washington towards the fossil fuels industry, American natural gas producers have remained remarkably resilient. Recently released data by the Energy Information Administration shows that the United States set a new record for natural gas production last year, representing a 3.5 increase over the prior year. Though the pandemic hampered demand in 2020, natural gas production this past year beat out the prior record amount set in 2019.
While record natural gas production is undoubtedly a good thing, there are a few underlying developments that raise some concern. For instance, the Gulf of Mexico had traditionally been a strong producer of natural gas, but federal offshore lands in the Gulf only represented about 2 percent of U.S. dry natural gas production last year. This revelation comes amidst President Biden’s continued opposition to expanding exploration and development of resources under the continental shelf. It is imperative that the Biden administration finalize and implement the next offshore oil and gas leasing Five-Year Program as soon as possible so we can utilize the abundant natural gas resources that exist offshore.
While barriers are clearly evident offshore, there is clear success happening onshore. It is encouraging to see this positive trend in natural gas production, especially in terms of the basins that producers are developing. Texas and Pennsylvania have driven the U.S.’ natural gas growth, and will prove to be vital cogs in the nation’s ability to combat recently volatile energy costs. Both the Permian and Haynesville Basins in Texas, and the Appalachian Basin in Pennsylvania, accounted for 59 percent of gross natural gas withdrawals in 2021.
The U.S. should be maximizing all possible areas of production, regardless of whether Texas and Pennsylvania have smashed records.
Similarly, if we want to put downward pressure on natural gas prices, which have spiked in large part due to Russia’s invasion into Ukraine, we must also address existing transportation restraints. Although an increase in production is certainly worth celebrating, matching infrastructure and capacity improvements must be built to accommodate such an increase. Pipeline projects have been the victim of excessive litigation that has been wielded to delay or prohibit the much needed infrastructure’s completion. In order to fully maximize the potential of Texas and Pennsylvania, the U.S. must prioritize domestic energy projects that can complement the growth in natural gas production.
Even with record levels of natural gas production, Americans are still suffering from surging electricity and energy bills. Washington must encourage greater production as a means to have supply reach the obvious consumer demands that exist both here at home, and abroad. So while the GAIN coalition applauds the success of America’s durable natural gas industry, we recognize there is much more work ahead if we truly want to make our country energy secure for the long-term.