{"id":34501,"date":"2018-05-24T07:02:58","date_gmt":"2018-05-24T12:02:58","guid":{"rendered":"http:\/\/olduvai.ca\/?p=34501"},"modified":"2018-05-24T07:02:58","modified_gmt":"2018-05-24T12:02:58","slug":"permian-growth-is-reaching-its-limits","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=34501","title":{"rendered":"Permian Growth Is Reaching Its Limits"},"content":{"rendered":"

Permian Growth Is Reaching Its Limits<\/a><\/h3>\n\"Oil<\/picture>\n
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The Permian isn\u2019t just suffering from a bottleneck for oil, but also for natural gas.<\/p>\n

In 2016, for instance, gas flows leaving the Permian typically clocked in at about 3.6 billion cubic feet per day (Bcf\/d), according to S&P Global Platts<\/a>. That number has ballooned to 6.3 Bcf\/d as of May 2018.<\/p>\n

Obviously, the surge in gas flows from the Permian is the result of a massive increase in gas production. Gas output has surged more than 135 percent since 2013 and is expected<\/a> to rise to just shy of 10.5 Bcf\/d (including natural gas liquids) in June 2018. The problem is that the region\u2019s ceiling on takeaway capacity stands at about 7.3 Bcf\/d.<\/p>\n

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Skyrocketing natural gas production has unsurprisingly weighed on regional prices. According to S&P Global Platts, natural gas prices at the Waha Hub in West Texas traded at an 8-cent per MMBtu discount to Henry Hub two years ago, but that discount widened to about $1\/MMBtu this month.<\/p>\n

With so much gas on their hands, Permian drillers have resorted to higher rates of flaring. The Environmental Defense Fund estimates<\/a> that top Permian producers are flaring as much as 10 percent of their gas. \u201cThis flaring is so extreme, it can be seen from space,\u201d EDF says. \u201cIn 2015 alone, enough Texas Permian natural gas was flared to serve all of the Texas household needs in the Permian counties for two and a half years.\u201d<\/p>\n