EIA forecasts U.S. natural gas production to increase next year

In its December 2021 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that U.S. dry natural gas production will increase to 97.5 Bcf/d by December 2022, up from 95.1 Bcf/d in October 2021 feet/day, an increase of 2.4 billion cubic feet/day (up 2.5%).

If realized, the December 2022 forecast production level would surpass the all-time record of 97.2 Bcf/d set in November 2019. The November 2019 record was set before the COVID-19 pandemic was announced, and before the pandemic-related drop in demand caused production to fall to a low of 87.3 Bcf/d in May 2020. Dry natural gas production has generally risen since October 2020. Natural gas production remains above 92 Bcf/d in 2021, with the exception of February, when winter storms severely impacted Texas oil and gas production.

Forecasts of natural gas production are influenced by expected gas production from newly drilled natural gas pilot wells, natural gas production from existing wells, and the volume of associated natural gas from oil production. The 2019-2020 period saw a decrease in the number of natural gas steerable rigs (rigs that drill primarily in natural gas-bearing formations). In August 2020, the rig count was at its lowest monthly average since 1987, the earliest year for which data is available. Gas-directed rig counts have generally increased since August 2020, averaging 102 in November 2021, but still about 40% below the 2019 average monthly count.

In the Haynesville region and the Appalachian Basin, we expect record dry gas production in December due to increased drilling activity and production per well, according to our Drilling Capacity Report. Associated gas production has also increased as producers have completed drilled but not completed (DUC) inventories, which peaked in June 2020. According to our December STEO forecast, an increase in gas steerable rig count and associated gas production will lead to an increase in dry gas production.