PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

U.S. Natural Gas Production Continues to Hit New Highs

By at 23 September, 2019, 5:15 pm

by Raymond J. Keating-

The U.S. Energy Information Administration recently reported that U.S. natural gas production continues to hit new highs, and this despite the fact that the price of natural gas has been falling. So, how does that work? Simple: private investment in innovation and efficiency.

The EIA noted:

● “U.S. natural gas production continued to increase in August, setting a new daily production record of 92.8 billion cubic feet per day (Bcf/d) on August 19, 2019…”

● “Natural gas production also set a new monthly record in August, averaging more than 91 Bcf/d for the first time.”

● “…the U.S. Energy Information Administration (EIA) forecasts dry natural gas production to average 93.4 Bcf/d from September through the end of the year. U.S. natural gas production increased by 7.1 Bcf/d (8%) between August 2018 and August 2019, led by production gains primarily in the Northeast.”

● “U.S. natural gas production has increased, even as natural gas prices have declined. Natural gas spot prices at the national price benchmark Henry Hub have been on a downward trend since early spring.”

U.S. energy production has been baffling the experts for at least fifteen years now. They failed to see the boon in both crude oil and natural gas production, assuming the U.S. to be at the mercy of producers in other nations. And they remain perplexed at continued U.S. production despite periodic declines in prices.

But, in reality, the U.S. oil and natural gas industry has been transformed, and now ranks as the largest energy producer on the planet.

As the EIA noted last month: “U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world’s largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world’s largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.”

All of this has been achieved due to private sector investment driving innovation and efficiency forward – including, of course, advancements in hydraulic fracturing and horizontal drilling. But there’s more. For example, an Entrepreneur.com analysis highlighted the roles of technologies like artificial intelligence, cloud computing, 3D printing, the internet-of-things, and robotics are playing in further transforming the oil and natural gas business.

For good measure, it must be noted that the energy sector is the domain of small, entrepreneurial firms – for example, 89.5% of employer firms among oil and gas extraction businesses have fewer than 20 employees.

Indeed, entrepreneurial firms have played key roles in driving the transformation of the oil and natural gas industry forward, and that will continue into the future.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

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