Association anticipates ongoing tight times for natural gas production

Natural gas is the most important feedstock for Louisiana chemical plants, so cheap gas has been a big plus for the Capital Region in recent years and, on balance, for the state as a whole. But for producers, low natural gas prices are forcing a shift into oil and liquid plays. In 2008, 82% of all the rigs in the United States were drilling for natural gas, says Don Briggs, president of the Louisiana Oil & Gas Association. Today, only 25% are doing so. In Louisiana’s Haynesville Shale, the number of rigs has plummeted from 140 at one point to 17. A price of about $5 per million British thermal units would still be good for the plants, Briggs says, while allowing producers to make a profit. “But $3.80 is a little tough,” he says. “You can’t drill for something, if it’s costing you $4 to find, you can’t find it and sell it for $3.50.” Natural gas is expected to remain cheap for a few more years, although liquid natural gas exports may help lift the prices to some extent, Briggs says. Sasol, based in South Africa, plans to take advantage of the natural gas glut by spending $16 billion to $21 billion building America’s first gas-to-liquids plant, which Gov. Bobby Jindal says would be the largest manufacturing investment in state history. —David Jacobs