Natural Gas Prices Fall Below Zero in Texas

Never heard of such a thing, but it’s doing just that.

Surging U.S. oil production in the Permian basin has helped crash oil prices. But the Permian is also home to skyrocketing natural gas production, and output is growing so fast that drillers are trying to give it away for free. When they can’t, they just burn it off into the atmosphere.

Unlike in the Marcellus shale, where natural gas is the main target, drilling in the Permian is focused entirely on crude oil. Natural gas is a nice bonus that comes along with the oil. But the drilling frenzy in West Texas and New Mexico has resulted in a glut of this associated natural gas. There is a pipeline bottleneck for crude oil, but there is also a shortage of pipeline space for natural gas.

The glut has become so bad that next-day prices for gas at the Waha hub in the Permian have plunged to a record low, falling to as low as 25 cents per MMBtu. In some instances, producers have actually sold some gas at negative prices. That means that a company is paying someone else to take the gas off of their hands. On Tuesday, the lowest price recorded was -25 cents/MMBtu (to be clear, that is negative 25 cents), according to Natural Gas Intelligence (NGI). It was the second consecutive day that prices were in negative territory.

More here or at the above link.

About RedneckGeezer

Backwoods ignorant redneck. (Or so they say...)
This entry was posted in Misc. Bookmark the permalink.

1 Response to Natural Gas Prices Fall Below Zero in Texas

  1. antzinpantz says:

    Bet we never see that here. And it’s cold already.

Comments are closed.