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Northeast natural gas producers have been increasing their fracking crews and their rig counts to prepare for the winter because winter is coming.
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Both fracking crews and rig counts in the Northeast have increased since late September as producers take advantage of the much higher winter prices. Northeast winter prices, especially in the demand areas, are much higher than Northeast summer prices. Producers take advantage of the much higher winter prices in the Northeast demand centers through the transportation capacity that they own from the producing areas of Pennsylvania, Ohio, and West Virginia into the demand areas of New Jersey, New York, Virginia, and New England. Although Dominion South is the dominant hub for Northeast production and TETCO (Texas Eastern Transmission Company) Zone M3 is mostly a demand area hub, most Northeast producers get the much higher TETCO M3 pricing by owning transportation capacity to deliver their production from Dominion South into TETCO M3. The pricing differential between Dominion South and TETCO M3 is huge during the meat of the winter months from December through February.
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Northeast Winter Demand
The main reason for the strong winter premium pricing in the Northeast is that Northeast natural gas demand is much higher proportionately during the winter months than it is for the rest of the US. Northeast winter natural gas demand is on average 83% higher during the December through February winter months compared to the April through October summer months. The rest of the US has natural gas demand 35% higher during the December through February winter months compared to the April through October summer months. Northeast natural gas winter demand increases at a much higher rate than the rest of the US, thus causing much higher winter pricing which natural gas producers want to take advantage of as much as possible by increasing production into the winter pricing period and choking it back as much as they can during the lower summer pricing period.
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Northeast Producers
Some of the major Northeast producers who have been increasing their fracking and rig count activity are Southwestern Energy
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Summary
Natural gas producers are increasing their fracking and rig count activity in the Northeast because winter is coming and with it comes much higher pricing than during the summer months. Northeast natural gas demand is proportionately much higher during the winter months than during the summer months leading to much higher winter prices compared to the rest of the US Lower 48. Northeast natural gas producers look to maximize this seasonal difference in pricing by trying to maximize their production output during the winter months.
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