The Westerly Sun
A BLOATED MARKET; Natural gas glut means drilling boom will bust

Sunday, April 22, 2012

The U.S. natural gas market is bursting at the seams.

So much natural gas is being produced that soon there may be nowhere left to put the country's swelling surplus. After years of explosive growth, natural gas producers are retrenching.

"Something is going to have to give," says Maria Sanchez, manager of energy analysis at Bentek Energy, a research firm.

Between November and March, daily natural gas demand fell 5 percent, on average, from a year earlier, according to Bentek Energy. Yet production grew 8 percent over the same period. "We haven't ever seen a situation like this before," says Chris McGill, Vice President for Policy Analysis at the American Gas Association, an industry group.

If current production and consumption trends were to continue, Bentek estimates that storage facilities would be full on Oct. 10.

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