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EIA: Usual Suspects See Supply Role Shrinking

Marketed natural gas production of the top-five producing states -- Texas, Louisiana, Wyoming, Oklahoma and Colorado -- grew 7.5% last year, but their combined share of U.S. gas output fell slightly to about 65%, according to the Energy Information Administration (EIA).

The five states' 2011 marketed production was 15.7 Tcf, according to EIA annual data. The shrinkage in their share of U.S. production reflects increased contributions from other states, particularly those in which operators significantly expanded development of shale gas formations, according to EIA.

Shale gas production from states such as Pennsylvania helped boost overall U.S. gas output by almost 8% in 2011.

Due mainly to drilling in the Marcellus Shale, Pennsylvania's marketed gas production last year more than doubled to nearly 1.3 Tcf, according to preliminary estimates from Pennsylvania's Department of Environmental Protection. Arkansas has also seen strong growth in its marketed gas production, with output more than tripling since 2007 due mainly to increased production from the Fayetteville Shale, EIA said.

In Texas gas production increased 4.5% from 2010 to 7.02 Tcf, the highest level since 1980, due in part to growing output from the Eagle Ford Shale, where drillers pursuing high-value liquid hydrocarbons are also producing growing amounts of gas.

In Louisiana, the Haynesville Shale in the state's northwestern region was one of the biggest shale producing plays in the country last year. The state's gas production grew 38% last year to 3.05 Tcf, according to EIA.

However, in Wyoming, gas production fell by 5.6% to 2.18 Tcf, the lowest level seen since 2007. Lower gas prices made the state's dry coalbed methane gas less profitable. Coalbed methane accounts for nearly two-thirds of Wyoming production.

Woodford Shale gas drove Oklahoma to 1.9 Tcf, a 3.9% production increase over last year, the state's second highest annual output since 1994, EIA said.

And in Colorado gas production grew about 1.4%, marking the state's 25th consecutive year to set an output record. Here, the Niobrara Shale in the northeast corner of the state gets most of the credit, according to EIA.

While Alaska is the country's second leading gas producer in terms of gross withdrawals, most of the state's production is not brought to market. Volumes far exceed local demand and there is insufficient pipeline capacity to transport gas to distant markets. This is something the state has been trying to fix for decades with some form of pipeline project. Most of Alaska's gas not brought to market is re-injected into existing oil fields to provide sufficient pressure to maintain oil production rates.

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