The EIA has begun tracking heat content of end-use natural gas, providing state-to-state comparisons of natural gas consumption. Gas in states with heavy ethane rejection generates more British Thermal Units (Btus) per cubic foot than states whose gas content is closer to pure methane.
High-Btu natural gas contains higher concentrations of natural gas liquids (mostly ethane and some propane) that have higher heat content than methane. Pure ethane has a heat content of 1,770 Btu/cf and pure propane 2,516 Btu/cf, according to the EIA’s data. It’s common in a low price environment, or in states with processing constraints or little ethane demand, for natural gas processors to leave ethane in the natural gas stream, a practice known as ethane rejection, rather than separate it for sale as a distinct product.
Source: U.S. Energy Information Administration, Natural Gas Monthly
“This is particularly evident in 2013 in the Marcellus Shale play in Pennsylvania, West Virginia, and Ohio, as well as in the Bakken formation in North Dakota,” the EIA reported.
There are operators in these basins who are removing and selling ethane, such as Range Resources (ticker: RRC), a large Marcellus operator that uses its sprawling market access to sell ethane. In the Bakken, as much as 30% of associated gas was flared due to takeaway constraints. A state-enforced cutback on flaring has increased gas infrastructure, and the ethane demand is expected to grow once a new petrochemical plant with ethane feedstocks is built in the region.
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