U.S. Ethane Production Hits Record High During May 2024: EIA

U.S. ethane production hit a record high of 3 million barrels per day (b/d) during May 2024, according to an Oct. 28 report published by the U.S. Energy Information Administration. The increase in ethane production can be attributed to persistent growth in ethane usage in the global petrochemical sector, higher ethane and natural gas production in the Permian Basin spanning New Mexico and Texas, and favorable production economics. Ethane is mostly used as a petrochemical feedstock to make ethylene, which is utilized to produce resins and plastics.

U.S. ethane production during the first half of 2024 averaged a record 2.8 million b/d. U.S. ethane production increased by nine percent to average 2.6 million b/d during 2023, in line with all time high natural gas production. Nearly all ethane is recovered at natural gas processing plants, which extract ethane and other natural gas plant liquids from raw natural gas. New Mexico and the Texas Inland refining districts accounted for 61 percent of all production in 2023. U.S. ethane production, consumption, and exports established record highs in 2023, according to data from the agency’s Petroleum Supply Monthly.

During the first half of 2024, in the New Mexico and the Texas Inland region districts comprised 62 percent of U.S. ethane production, compared to 60 percent during the first half of 2023. In these two districts, ethane production averaged 1.7 million b/d during the first six months of 2024, up seven percent compared to the same period during 2023. Ethane production in the Appalachian No. 1 refining district rose during the first six months of 2024 by 35,000 b/d compared to the same period in 2023 and averaged 327,000 b/d.

Higher ethane demand from domestic and international users has been a key driver of U.S. ethane production. Domestic ethane usage averaged 2.3 million b/d during the first six months of 2024, up 0.2 million b/d from the same period in 2023.

The agency projects ethane production to average 2.8 million b/d during 2024 and 2025, up five percent compared to 2023. Moreover, consumption is also forecast to increase by 5 percent during 2024 and 2025 to average 2.3 million b/d. U.S. net ethane exports are expected to see a 11 percent increase from 2023 to 2025.