The Eagle Ford Shale will drive a 15% increase in onshore gas production from the Texas Gulf Coast by November, offsetting declines elsewhere in Texas, according to Bentek Energy LLC. The firm said it expects Texas to be "increasingly long gas in the near term as Eagle Ford production growth continues to outpace demand," putting downward pressure on regional prices. According to Bentek's Texas Observer, the state's supply is up by 1 Bcf/d, or 5%, from a year ago, with the increase driven by growth in onshore production. Demand is up only 0.6 Bcf/d over the same period, according to Bentek. "Due to the combination of Marcellus [Shale] pushback and milder winter weather, net Texas outflows have declined nearly 0.4 Bcf/d since this time last year. As a result, Texas is currently 0.8 Bcf/d longer supply than year-to-date 2011," Bentek said.
The bipartisan Center for Rural Pennsylvania recently held a hearing to examine how rural parts of the state can benefit from cheap natural gas supplies from the Marcellus Shale. State Sen. Gene Yaw said "being able to use the local commodity would mean a great deal to rural residents," citing the possibility of lowering local retail energy bills. Local utility companies have been reporting that the conversion to natural gas by retail customers is "very robust" throughout rural areas, according to Tom Murphy, codirector of the Penn State Marcellus Center for Outreach and Research. "Demand for distribution line extensions has been growing," Murphy said. The largest local utility, UGI Utilities Inc., reported last year it took on 10,495 new residential heating customers, and 7,362 of those were conversions from oil to natural gas.