Report: Natural gas drilling activity down amid low prices
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Permitting activity for new natural gas wells in Pennsylvania is down significantly, as natural gas prices continue to tank, S&P Global reports.
Unconventional well permits from the Pennsylvania Department of Environmental Protection were down by 23% in August and 14% in July compared to the same months last year, S&P Global said.
Although Westmoreland County showed a year-over-year increase for August, Greene County had a significant decline — from 30 in August 2018 to 11 this year — offsetting some counties’ gains, according to DEP.
The S&P Global report attributed the decline in part to low nationwide gas prices, which are expected to persist for the near future.
“Low gas prices are clearly having an impact on the rig count, with gas rigs at the lowest level since April 2017, though supply has yet to be affected,” S&P Global quoted Jefferies LLC analyst Zach Parham as saying.
The Henry Hub natural gas spot price averaged $2.22 per million British thermal units in August, down 15 cents from July, according to the U.S. Energy Information Administration. This summer, prices have declined amid rising natural gas production.
Analysts believe low prices also are a factor in the decision by some natural gas producers, including EQT Corp. and CNX Resources Corp., to cut back on staff.
Pittsburgh-based EQT announced on Tuesday that it was reducing its workforce by 23%, or 196 positions. Canonsburg-based CNX confirmed last month that it was laying off 50 people.