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Today in Energy

October 12, 2022

U.S. natural gas production set a new record in 2021

Sources of annual U.S. natural gas supply (2010&2021)
Data source: U.S. Energy Information Administration, Natural Gas Annual 2021
Note: Small volumes of supplemental gaseous supplies not shown. Federal GOM=Federal Offshore Gulf of Mexico.

U.S. dry natural gas production set an annual record in 2021, increasing by 3.5% from 2020, according to our recently released Natural Gas Annual. In 2020, production had dipped because of reduced economic activity during the COVID-19 pandemic. In 2021, dry natural gas production exceeded the previous record set in 2019, and our Short-Term Energy Outlook forecasts that production will continue to grow through 2023.

Driven by elevated natural gas prices, U.S. production in the largest resource basins has been increasing. Texas and Pennsylvania have driven this increase; production grew by nearly 1.5 billion cubic feet per day (Bcf/d) in both states between 2020 and 2021. Texas overlays the Permian Basin and Haynesville Basin, which were both major sources of production growth in 2021. Similarly, Pennsylvania overlays the Appalachian Basin, which now accounts for nearly one-third of all U.S. dry natural gas production.

Historically, the Federal Offshore Gulf of Mexico has been an important region for natural gas production, representing 9% of dry natural gas production in 2010. Natural gas production in the Gulf of Mexico, however, has been trending downward in more recent years because of:

  • Aging wells with declining productivity
  • A focus on oil development
  • The high cost and complexity of undersea production
  • Exposure to hurricanes

The Gulf of Mexico contributed just 2% of U.S. dry natural gas production in 2021. We expect production declines in the region to continue in the coming years, only partially offset by new projects.

Net natural gas imports accounted for 11% of total supply as recently as in 2010, but they accounted for none of the total supply in 2021. Imports of natural gas fell between 2007 and about 2017, and they have remained at similar low levels since. The United States is a net exporter (exports exceed imports) of natural gas. Exports of natural gas have been growing each year since 2016, driven by exports of liquefied natural gas (LNG), which reached a record high in 2021.

Principal contributor: Mike Kopalek