The buzz about natural gas is slowly diminishing as prices continue to drop, sparking renewed interest in oil. The combination has led to a decline in the number of gas drilling rigs in Pennsylvania’s Marcellus Shale region and across the country.
While experts contend the U.S. natural gas boom has subsided, they assert it’s not over and that companies are now targeting the more profitable “wet gas” used to produce butane and ethane in addition to expanding development in other markets.
While this may be true, the staggering decline in the number of active gas rigs compared to that of oil rigs over the past three years supports the undeniable shift towards oil as companies express growing concern about the profitability of natural gas at current prices.
As of last week, the number of gas drilling rigs nationwide had dropped to 652, down from around 1,600 in operation in the fall of 2008. On the other hand, the number of active oil rigs is over six times the number during the same time period, rising from 200 to an astounding 1,317.
New York and Pennsylvania natural gas supplier National Fuel Gas Co. (NYSE: NFG) even announced further reductions in production targets for its current fiscal year, attributing the cutbacks to the steady decline in natural gas prices and decreased production at its Seneca Resources subsidiary from the Marcellus Shale region.
That’s all for now,