Texas Drillers Bearish On New Gas Production, Despite Spiking Prices

Freezing weather across much of the country has caused a rapid run-up in natural gas prices. It's doing little to stimulate new drilling activity in Texas.

Last week, the spot price of natural gas in the U.S. spiked above $6.00 per million BTUs. That’s the highest level the market has seen in more than five years, according to the U.S. Energy Information Administration.  But it’s less than half the most recent peak, set in June 2008.

Natural gas drilling in Texas has plummeted in recent years, along with spot market prices.  Karr Ingham, petroleum economist for the Texas Alliance of Energy Producers, says that’s not likely to change anytime soon.

“We’re rather accidentally producing more gas now than would be the case with so few rigs drilling for natural gas, because it’s being produced as an ancillary product of crude oil production. In other words, this thing called ‘casing head gas,’ which is just gas produced off a well that was drilled to produce crude oil, is really propping up production and keeping a lid on prices.”

Ingham estimates that nearly 90% of the rigs in Texas are now drilling for crude oil, rather than natural gas.


Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined News 88.7 in January 2011. Since arriving in Houston, he has reported on the many changes wrought on the region’s economy by the revolution in domestic oil and gas production. His non-energy reporting runs the gamut from white-collar crime to cattle ranching. His work has aired on...

More Information