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U.S. ENERGY INFORMATION ADMINISTRATION EIA Assesses Natural Gas Productive Capacity for 2003Estimates 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 today by the 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. Maintaining or increasing gas well drilling is critical to maintaining or increasing gas productive capacity. Wells producing for one year or less contribute between 25 and 30 percent of total wellhead capacity. The two largest supply areas, Texas and the Gulf of Mexico, which together produce about 50 percent of the nation's total gas production, also have the highest percentage (30%) of wellhead capacity from wells one year old or less. If drilling were to stop completely, all surplus or unutilized wellhead capacity would vanish in less than a year. Recent trends in productive capacity have closely tracked the number of well completions, which were down significantly (25%) in 2002. A large increase in well completions (34%) is projected for 2003 with an associated increase in productive capacity, (see Figure 1). The report shows a decreasing amount of surplus capacity for 2003 in the Federal Offshore Gulf of Mexico because of lower drilling levels, although higher productive rates of recent discoveries in that area could increase capacity. Increases in surplus capacity are also possible in the Rocky Mountain Area with the construction of pipelines to transport gas from coal bed gas wells. Natural Gas Productive Capacity For the Lower-48 States is available on EIA's Internet site at: http://www.eia.doe.gov/oil_gas/fwd/ngcap2003.html.
-EIA- EIA Program Contact: John Wood, 214/720-6150 EIA-2003-06 File Last Modified: March 31, 2003
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