Natural Gas Reached New Highs In 2018 With Minimal Growth In Mountain West

Nov 15, 2019

U.S. Natural Gas dry production, consumption and exports (2000-2018)
Credit U.S. Energy Information Administration

Natural gas had a banner year in 2018 with production, consumption and exports all hitting record highs. Production actually saw its largest year-over-year growth by volume since the Energy Information Administration began collecting the data in the 1930.

Consumption of natural gas increased in every sector including commercial, industrial, and residential. The most growth though took place in electricity generation as coal continues to decline. Natural gas began to overtake coal in 2015 as the primary source of electricity generation in the U.S.

Most of the growth took place in the Southern Plains states and the Midwest, as the Mountain West saw minimal to no gains. It's still a high-producing region.

Carl Larry, market specialist for Refinitiv, a financial data provider, said this region isn't as developed as it could be.

"When it is developed, it's still kind of hard to find outlets for that gas. And with the supply being like it is, if the area can't keep up with the demand there's no reason to increase their production because we just can't move it out," he said.

Chuck Mason, professor of petroleum and natural gas economics at the University of Wyoming, agreed the Mountain West struggles due to being farther away from where the demand is, not to mention export facilities. But states like Wyoming also won't see as much growth simply due to geology increasing prices.

"Our deposits tend to be quite deep, so that it's typical to have a well in Wyoming drilled 10,000 feet or more, so it's more expensive," Mason explained.

Still, there was minor growth in Colorado, Montana and Wyoming. Production dipped in Utah. Larry and Mason agree production is set to dip in the near-term with consumption starting to drop. The high production has also depressed pricing.

Wyoming and Colorado are leading natural gas producers.

Have a question about this story? Contact the reporter, Cooper McKim, at cmckim5@uwyo.edu.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana, and KRCC and KUNC in Colorado.