Shale play sweet spots won’t stay sweet forever; base production decline is a fact of life, and with projected domestic demand growth, $3 natural gas won’t cut it, Range Resources Corp. CEO Jeff Ventura told a Houston audience Thursday.

“By 2020, projections are that natural gas demand in the United States will increase by about 20%, which is about 14 Bcf/d,” Ventura said at CERAWeek by IHS Markit. Base decline rates in the United States average about 6 Bcf/d per year, he added.

“By year-end 2020, the United States has to have about 24 Bcf/d to offset decline and about 14 Bcf/d to meet incremental demand. So when combined, that’s an additional 38 Bcf/d that’s needed by 2020.”

The sweet spots of the major plays — except for the Permian Basin and Marcellus Shale — will experience “exhaustion” within the next 10 years, Ventura said. Core areas won’t last forever, and higher prices will be needed to incentivise drilling outside the core, Ventura said.

“Altogether, by 2025, the U.S. will have to add about 77 Bcf/d to offset decline and meet incremental demand,” Ventura said. “Dry gas production in the United States is about 71 Bcf/d. The U.S. will have to more than double production from where it is today, no small task. In my opinion, the futures pricing for natural gas is not capturing this.

“…I believe that the current futures price of less than $3, or roughly $3, for natural gas is too low and a higher price will be required to incentivise drilling in noncore areas in order to meet future demand. The good news for natural gas consumers is that on an energy equivalent basis, $3 gas is a Btu equivalent of $18/bbl oil, so there’s ample room for the price to increase without impairing its cost competitiveness.”