Lies, Damn Lies, and Charts Without Context
As best I can tell, few bothered to read what the EIA had to say as much as obsess on this one graphic they put out there.
Of course, it isn't the case just yet. Natural gas prices are relatively low, but have been stable for much of the last year or so. Natural gas in storage is not too far from normal parameters. So what gives?
If you looked at that graphic too quickly.. or didn't bother to look into the context more you might have assumed that the graphic depicted all US natural gas production. Go look again, it clearly says it is just for Northeast production. Remember also that natrual gas is shipped around the country in pipelines so it really is a national, or probably best described as a continental market with the entire Northeast not exactly a big part of the production story. So it is the supply and demand cumulative across North America that really impacts the market prices.
Just for fun, here is a bar chart I made quickly of Pennsylvania's natural gas production compared to the United States' production as of June 2011. You will need to scroll down to get to Pennsylvania's data:
" Natural Gas: Although minor, Pennsylvania’s natural gas production has grown in recent years. The State’s Marcellus shale region, in particular, has experienced markedly increased new development over the past few years. However, compared to Pennsylvania’s total natural gas production, shale gas production remains minimal. "Note they start out with the description 'minor'.
Clearly the 'minimal' part is changing, but even with the big increases in the last year, Pennsylvania is still far from a big part of total US production and a small fraction of production in Texas. You might not think so reading all the hype. A few folks I have had conversations with recently really believe Pennsylvania is now, as in already, the biggest natural gas producer in the nation. Some PR folks out there somewhere really deserve bonuses.