Associated gas production from U.S. falls 4.1% in 2020, EIA study shows

The annual production of associated natural gas from five major U.S. onshore oil producing regions fell in 2020 for the first time since 2016, according to a study from the U.S. Energy Information Administration (EIA).

When natural gas dissolves in crude oil under the pressure of a rock formation, associated gas is released as the pressure on the oil is relieved when it comes to the surface. Until 2020, the share of associated gas in these five regions, along with oil production, was increasing each year, the EIA reported.

Between 2016 and 2019, associated gas production grew at its most rapid pace (6.1 Bcf/d) because of high levels of new oil production. But that growing trend reversed in 2020, when production of both oil and associated gas declined with decreased demand for oil following responses to the COVID-19 pandemic, the EIA reported.

Associated gas production averaged 14.2 Bcf/d in 2020, down 4.1% from 2019. The study also showed that the share of associated gas produced from the five key onshore regions – Permian, Bakken, Eagle Ford, Niograra and Anadarko – fell by 1.5% from 2019 and averaged 37.7% of all natural gas produced in the regions.

Meanwhile, total oil production fell from these regions fell 9.2% in 2020 from the previous year, the EIA reported.

The Permian is the one region that bucked the trend. In the Permian, which covers much of West Texas and Southeast New Mexico, operators saw additional production of both oil and associated gas in 2020, although these increases did not offset declines from the other four regions. In 2020, the Permian accounted for half of the total associated gas in the U.S. The EIA attributed some of the increase in associated gas production from the Permian to greater gas takeaway capacity from the region.

Despite the decline in associated gas production nationwide, the EIA reported an increase in natural gas plant liquids in 2020 in response to a steady increase in demand for ethane, the EIA reported. U.S. production of ethane, which serves as a petrochemical feedstock for ethylene crackers, grew by 182,000 b/d, or 9.9% in 2020, the EIA reported.