Natural Gas Drilling in the United States Plummets at Steepest Rate Since 2016

Per a report from Baker Hughes Co., the United States natural gas sector is quickly halting drilling owing to oversupply conditions that have prompted a collapse in natural gas prices across a 9-month period. 

On May 12, 2023, Baker Huges reported that exploration companies reduced rigs by 16 to 141 in early May. This represented the most marked decline since February 2016. 

Nabors Industries Ltd., one of the leading rig providers to shale drillers, warned in April about the decline in rig orders. The rig provider projects a 9% decrease in its US rig leases by June’s conclusion. Its bearish projections come during a time when prices once commanded over $10 per million British thermal units in late August 2022 and have since dropped to $2.25. 

Bloomberg gave an explanation as to why there is a natural gas oversupply:

“The glut developed after a key US gas-export facility was shut by a fire and abnormally mild winter weather gutted heating demand.”

Like any other sector, natural gas is subject to the whims of markets. For it to function properly, these market dynamics must be allowed to freely operate. If we want cheap reliable energy, there needs to be a total separation of economy and state. Unfortunately, there are many people in the US administrative state that want to regulate this sector completely out of existence. 

We need a new political class that’s pro-reliable energy to ensure that we have cheap energy that undergirds the most robust economy on the planet.

Our Latest Articles