Every week, the EIA proclaims a new record for natural gas production. But their own forecasts show that the U.S. will be short on supply by October of this year. A price increase is inevitable beginning later in 2016. Popular Myth vs Reality The popular myth is that gas production will continue to increase and that prices will remain low for years. In the myth, price has no effect on production. The reality is that price matters and production is down 1.2 bcfd 1 since September 2015 (Figure 1). Figure 1. U.S. dry gas production. Source: EIA and Labyrinth Consulting Services, Inc. (Click image to enlarge) The production increases reported by EIA are year-over-year comparisons that don’t reflect declines during the last 4 months. Prices have fallen to less than half what they were in early 2014. The average price for the first quarter of 2016 is only $2.25 […]