PPT Slide
Natural Gas Productive Capacity for the Lower-48 States
- Oklahoma production peaked when its effective capacity utilization (production divided by effective productive capacity) reached 90 percent in 1990 - 1991. The State has been producing at 95 percent or more of its effective productive capacity for most of the last 9 years, and production has been at or very close to 100 percent of effective productive capacity for the last 5 years (Figure 3).
- The disappearance of seasonal production fluctuations is also an indicator of shrinking surplus capacity and declining effective productive capacity limit. By the early 1990s, seasonal fluctuations in production had faded as the capacity utilization reached 90 percent. (Gas storage operations may also affect seasonal production.)
- The rapid price increases of 2000 lead to increasing production and effective productive capacity because the EIA Drilling Rig Model is essentially driven by prices. Specifically, the drilling rig forecasts are based on forecasts of oil and gas revenue (production times price). In turn, the rig forecast generates the new wells and the substantial new well component of the projected effective productive capacity. Compared to price, production has little impact on the rig count because it varies by only a few percent and therefore changes revenue by only a few percent while prices can double or triple revenue.