April 14, 2003—Estimates of available productive capacity for natural gas during 2003 are developed and compared to forecasted natural gas demand in the latest edition of “Natural Gas Productive Capacity For the Lower-48 States,” released in April by the US Energy Department’s Energy Information Administration (EIA).
Available productive capacity appears sufficient to meet the level of demand for natural gas production forecast in EIA’s Short Term Energy Outlook. However, the relatively narrow margin of surplus capacity—roughly 10 percent of the projected 51.4 billion cubic feet per day average production rate required to meet gas demand in 2003—limits the available production response to any sudden demand increase or drop in production. Withdrawals of stored natural gas can normally respond to such problems, but gas storage levels are now at record lows. Therefore, the narrow surplus margin indicates a significant potential for short-term price increases in the event of such contingencies.
Recent trends in productive capacity have closely tracked the number of well completions, which were down 25 percent in 2002. A 34-percent increase in well completions is projected for 2003 with an associated increase in productive capacity.
