Natural gas prices are climbing, but overall production in Pennsylvania has lagged year-over-year.
The latest report from the Independent Fiscal Office says prices in the third quarter of 2022 jumped almost 95% compared to the same period last year. Nor will prices drop soon, either. The Pennsylvania average price was $6.89 per million BTU, compared to $3.54 in 2021.
The dramatic increase in prices was due to the combination of weaker-than-usual production growth and strong demand (domestic and international),” the report said. “Current forecasts project that prices will remain elevated in the short term due to global supply and demand pressures.
Production declined slightly compared to the third quarter of 2021, falling by just under 1%. So far, in every quarter of 2022, production didn’t increase compared to last year. In 2021, however, quarterly production growth was notably higher, ranging from 7.1% to 7.8%.
Those trends should reverse in the future, however. Higher prices have spurred new wells getting put into production (known as a well “spud”). Almost 160 new horizontal wells were started in the third quarter, a 42% increase compared to the third quarter of 2021.
The number of new horizontal wells spud in the third quarter of 2022 was the highest quarterly spud count since the second quarter of 2019
New wells should boost production, which has generally fallen since 2018. Pennsylvania now has 11,119 wells in production, a 4.1% increase compared to 2021.
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