Report shows rebound for natural gas as production, prices rise

Rachel McDevitt

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I report on energy and the environment for StateImpact Pennsylvania at WITF.

My work focuses on responses and solutions to climate change in the state legislature and communities around the state. I trace my interest in these issues back to my time as a Girl Scout and this episode of Rocko’s Modern Life.

I look forward to winter just for the chance to ski a few times each season. I try to keep myself from doom-scrolling on my phone by keeping my hands busy knitting and learning to play the piano.

I grew up in Cambria County, Pa. and graduated from Temple University. I started at WITF just after Christmas in 2014.

Keith Srakocic / AP Photo

FILE—In this file photo from March 12, 2020, work continues at a shale gas well drilling site in St. Mary's, Pa.

May 28, 2021 | 3:13 PM

Natural gas prices in Pennsylvania shot up in the first three months of 2021, a sign that the industry may be rebounding as the COVID-19 pandemic eases.

The latest production report from the commonwealth’s Independent Fiscal Office shows the state’s average natural gas price from January to March was 64 percent higher than the same time last year.

Because of cold temperatures and strong energy demand in February, including the disaster in Texas, the commonwealth’s average price hit $2.53 per million British thermal units (MMBtu).

Prices had been falling since the most recent peak of $3.25 per MMBtu in late 2018.

The IFO said Pennsylvania’s gas industry increased production by 5.4 percent in the first quarter of 2021, compared to the year before. That’s mainly due to growth in Washington and Bradford counties.

It’s the lowest first quarter growth recorded since 2017, but the IFO said it’s a “clear acceleration” from the previous several quarters of moderate growth.

Pennsylvania’s gas industry drilled 133 new wells from January to March, according to data from the Department of Environmental Protection. Companies drilled 153 wells in the first quarter of 2020.

The IFO said it’s the first quarter-to-quarter rise since early 2020 when drilling started to slow because of record-low gas prices and a drop in demand caused by the COVID-19 pandemic.

The report noted Pennsylvania’s share of nationwide gas production rose one percentage point in 2020 to reach a record 17.9 percent.

The U.S. Energy Information Administration reported natural gas-fired power generation saw a nearly 7 percent decrease in the first four months of 2021 compared to the same period in 2020. The agency said it’s the first year-over-year decline since 2017, and it’s the result of higher natural gas prices and increased competition from renewables.