(Bloomberg)
America’s energy explorers have become so good at pulling natural gas out of the ground that government forecasters are having a hard time figuring out how much they’re producing.
This month, the Marcellus shale formation of the eastern U.S., the country’s biggest gas play, will yield 17.4 billion cubic feet a day, the U.S. Energy Information Administration said Monday. That’s almost 2 billion cubic feet, or 11 percent, more than the agency had forecast last month. It said the field’s output was revised based on more recent production data from Pennsylvania.
It’s a blow for bullish gas traders who’ve been waiting for drillers to curb output and rescue the market from futures trading near a 17-year low. The agency’s revision suggests that it may take longer than analysts had previously forecast to slow the flow from the Marcellus, a scenario that would keep the biggest stockpile glut since 2012 expanding and prices under pressure.
The changes are also a testament to producers’ ability to “choke” the flow of gas from existing wells in response to changes in the market, Jozef Lieskovsky, a senior analyst at the Energy Information Administration in Washington, said in an e-mail Monday.
The revision to the agency’s data is “unusual,” said Lieskovsky. “We believe it is not only a story of higher productivity, but also choking existing wells, and increased production after new pipeline capacity came online.”
Producers have used this process known as choking to restrict output from wells when prices are low, when there isn’t enough pipeline capacity to carry their gas to market, or to keep them flowing for longer. They’re turning up the spigots on some wells as new pipelines are placed into service to move fuel once trapped in the Marcellus to demand centers across the U.S.
