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Pennsylvania natural gas prices rise as production falls, report says

Metering equipment at a producing gas well in Susquehanna County.
Marie Cusick
StateImpact Pennsylvania
Metering equipment at a producing gas well in Susquehanna County.

Natural gas production fell in Pennsylvania over the last few months as prices continued to rise.

The latest report from the state’s Independent Fiscal Office shows the average price of Pennsylvania gas reached $6.89 per million British thermal units in the third quarter of 2022.

That’s up more than 94 percent from the same period last year when prices averaged $3.54 per MMBtu. Prices averaged $4.10 per MMBtu at the beginning of this year.

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According to data from the Department of Environmental Protection, the volume of gas pulled from Pennsylvania’s fracked wells fell by 0.8 percent in the third quarter of 2022, compared to the same time the previous year.

It was the third quarter in a row that production did not grow compared to the same quarter the previous year and the strongest year-over-year drop in quarterly production since monthly data started to be published in 2015.

At the same time, companies drilled 158 new wells, a 42 percent increase over the same period in 2021.

The IFO says the new drilling was likely in response to high gas prices.

The federal Energy Information Agency is predicting natural gas prices at the U.S. benchmark Henry Hub will average $6.09 per MMBtu this winter, the highest price since winter 2009-10.

The EIA says that’s due to natural gas storage levels that are 4% below average heading into winter and more demand for liquefied natural gas.

The agency expects Henry Hub prices will start to go down in the spring of 2023 as production growth continues and winter demand for heating subsides.