Natural gas production again broke records last year in Pennsylvania even as activity declined amid a weak market.
Unconventional natural gas volumes reached 6.8 Tcf in 2019, up from 6.1 Tcf in the prior year. Conventional gas production continued slipping as it has for years now to 71.4 Bcf in 2019 from 102.2 Bcf in 2018, according to the state Department of Environmental Protection’s (DEP) annual oil and gas report.
Even still, the agency said last year’s production represents “the largest volume of natural gas on record that has been produced in Pennsylvania in a single year.”
Production growth has decelerated since then. Natural gas producers have faced their share of headwinds over that time, including a supply glut that has kept prices consistently low and restive investors looking for better returns. Operators were already in the process of cutting budgets and activity when the Covid-19 pandemic hit earlier this year and destroyed demand.
Some of those challenges are evident in the number of drilling permits issued last year. They declined to 1,705 from the 2,149 issued in 2018 and were well below the recent peak of 4,610 in 2013.
The agency continued to improve the speed at which it issued permits, which has in years past been a major bone of contention among the industry. The average time to issue drilling permits dropped from 32 days to 26 at the southwest district office between 2018 and 2019, while the northwest district office issued them in 26 days on average, versus 31 in 2018. Those numbers are down from peaks of 104 days in the southwest district and 61 in the northwest district in 2017. The eastern oil and gas district does not issue drilling permits.
DEP said oil and gas operators drilled 787 wells in Pennsylvania in 2019. The tally included 554 unconventional gas wells drilled into the Marcellus Shale, 41 unconventional natural gas wells drilled into the Utica Shale and Point Pleasant formation. Twenty-one unconventional wells were also drilled into other formations, while 171 conventional oil wells were drilled.
DEP also noted that 90% of produced fluids were recycled and reused in 2019, a number that Marcellus Shale Coalition president David Spigelmyer said set a record and complemented the industry’s regulatory compliance rate.
The agency, which regulates oil and gas development in the state, said it conducted 35,324 compliance inspections last year, down from 36,873 inspections in 2018. DEP issued 5,496 violations last year, compared to 6,022 in 2018. The agency began sending notices of violation in 2018 to operators who failed to review and certify their emergency response plans. It also increased inspections at pipeline development sites in 2018.
The violations resulted in about $4.1 million in fines and penalties in 2019, compared to the $4.2 million that was collected in 2018. Over the last decade, the agency has collected roughly $43.7 million for noncompliance at oil and gas sites.
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