Natural Gas Rig Count Drops

The number of rigs drilling for natural gas has dropped by about 25% since the 2008 high.

(LINK at Bloomberg). See the raw data at Baker-Hughes.

What does this mean to the Alaska Gas pipeline? - not much in the short term, but it will increase spot gas prices building the case for the pipeline. On the flipside drilling in the lower 48 is easier to ramp up if and when natural gas prices increase.

In the game of being first-ist with the most-ist a firm Alaska Gas Pipeline project could suppress lower 48 drilling programs. This would increase gas prices on the front end of the pipeline project and improve the economic performance.

The Bloomberg article points to lower rig counts out to 2012.