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Permian Basin Becomes U.S. Top Producer of Oil, Gas

Oil and Gas

Business Honor
18 November, 2024

Permian Basin leads U.S. in both crude oil and natural gas production, setting new records

A landmark year for the United States in terms of energy production, a new report has revealed that the Permian Basin not only holds the title of the country's largest producer of crude oil in 2023 but also that it has edged past this benchmark to become the nation's largest producer of natural gas, according to the Energy Information Administration (EIA).

In 2023, associated natural gas increased 7.9 percent year-over-year to an average of 17.1 billion cubic feet per day (Bcf/d). The reason is because associated natural gas comes out of the wells with oil, because most of the production targets are on crude oil. It comes from five of the major U.S. oil-producing basins-the Permian, Bakken, Eagle Ford, Anadarko, and Niobrara.

The Permian Basin, covering West Texas and southeastern New Mexico, in 2023 accounted for 46% of U.S. crude oil production and also 11.5 Bcf/d of associated gas-accounting for the majority of associated gas produced in the country. It will continue in that position; for its part, the region accounted for about two-thirds of total U.S. associated natural gas production in 2023, much as it did in 2022.

Other large regions also produced enormous amounts of associated gas. For instance, in North Dakota, 2.3 Bcf/d and approximately 70 percent of the total natural gas produced in that region came from the Bakken area. Second was the 1.8 Bcf/d in the Eagle Ford region in south Texas, while third was the aggregation of the Niobrara and Anadarko regions with a total of 1.5 Bcf/d.

Associated natural gas now constitutes 36.7% of total U.S. natural gas production, down a hair from 37.4% in 2022. This production of associated gas has also naturally contributed to record-level production of ethane, a key feedstock product in the manufacture of plastics, fibers, and other industrial products.