American energy companies have spent billions of dollars in the past decade exploring for natural gas.
But in parts of Texas and New Mexico, The Wall Street Journal reports there is now so much of it that it’s sometimes worthless. Some companies have even had to pay buyers to take it away.
Shale drillers in the Permian Basin are producing vast amounts of gas as a byproduct of prospecting for oil. But there aren’t enough pipelines to take all the gas to market, causing some of it to become landlocked, and sending local prices into free fall.
Gas prices in parts of the prolific region hovered near zero last month and some trades went negative, to as low as a negative 25 cents per million British thermal units, according to S&P Global Platts.
Energy companies say last month’s zero pricing could be a sign of things to come in the Permian area next year, as more oil pipelines get built and companies ramping up production of crude, a far more lucrative product, get stuck with more gas that has nowhere to go. Read the full story.