Oil and gas fields, no matter how productive, eventually decline. Before the transformative impact of the shale boom, U.S. oil production was in steady decline. for decadeswhile natural gas production had capped.

The impact of the shale boom on American production

But the rise of shale drilling changed everything. Beginning in 2006, U.S. natural gas production jumped 94%, and in 2009, oil production also hit a milestone, eventually climbing 170%.

The end of the wave?

For years, experts have debated how long this shale surge will last. Now, the Energy Information Administration (EIA) has offered a clue: U.S. shale gas production, which accounts for 79% of all dry gas production, declined slightly in the first nine months of 2024 compared to the previous year. If this trend continues, 2024 could mark the first recorded decline in U.S. shale gas production since the EIA began tracking it in 2000.

Breaking down the numbers

Total U.S. shale production fell 1% to 81.2 billion cubic feet per day (Bcf/d) from January to September 2024, while production of other dry gases increased 6%, to achieving an overall average of 103.3 Bcf/d. The decrease was primarily due to declines in the Haynesville (down 12%) and Utica (down 10%) areas, with only the Permian region showing growth (up 10%).

What is the impact of low prices on production

Falling natural gas prices, which reached record levels in 2024, have contributed to slowing production, particularly in dry gas regions like Haynesville. Reduced profitability has led several operators to shut down wells, and the number of active rigs in the Haynesville, Utica and Marcellus areas has declined significantly since late 2022.

As of September 2024, the Haynesville had only 33 rigs in service, a 53% decrease since January 2023, and the Utica and Marcellus also saw their rig counts decline by over 50% and 36 %, respectively.

Fewer installations, lower efficiency

Higher drilling costs at Haynesville and Utica, along with lower demand, have further limited production. In September, Haynesville’s production was 13.0 Bcf/d, down 14% from its 2023 peak. Meanwhile, the U.S. benchmark Henry Hub natural gas price averaged 2.10 $ per million British thermal units (MMBtu) in 2024, a decrease of 79% compared to 2022 inflation. -adjusted maximum of $9.39/MMBtu.

What awaits us?

In the last Short-term energy outlookThe EIA projects that U.S. dry natural gas production will average 103.5 Bcf/d in 2024, down slightly from 2023. For 2025, the agency projects a modest rebound, with production expected to reach 104. 6 Bcf/d.

Although the decline in shale production is remarkable, the potential for future growth remains, dependent on market dynamics and demand.

Conclusion

The shale boom has reshaped the U.S. energy industry, but recent declines in production suggest that rise may be slowing. Falling gas prices and fewer active rigs have led to a decline in production that raises questions about the future growth of U.S. shale.

As production levels stabilize, market observers will want to see how the industry adapts to changing economic and environmental factors. Whether a temporary decline or a sign of a long-term trend, the future of shale gas production will play a crucial role in shaping the U.S. energy market.