SHREVEPORT, La.—It may be “a popular time to talk about the Haynesville again” as the unconventional play comes back to life—but producers in the play face plenty of competition, David Braziel, director of financial and fundamental analysis for RBN Energy, told attendees at Hart Energy’s first DUG Haynesville conference Feb. 21.

Braziel started his spotlight presentation with a broad, macro look at domestic production trends. The upticks are impressive, he noted.

“In the last 10 years, U.S. crude production has roughly doubled, from 5 million barrels per day (MMbbl/d) to 10 MMbbl/d as of November 2017,” he said. “There have been some hiccups, of course, like the oil price crash of 2014 and 2015 but production has rebounded.” The biggest driver of that trend is the play “that is the center of everyone’s attention: the Permian.”

Crude producers’ success in West Texas and New Mexico means that capital as poured into the basin, Braziel said, on the hunch that the growth trend will continue. That Permian crude has a lot of associated natural gas, which has helped push U.S. natural gas production up to 78 billion cubic feet per day (Bcf/d). Because all that is associated gas, the Permian’s gas flow did not dwindle all that much even as gas prices slumped.

At the same time, the Marcellus and Utica plays’ gas output swelled more than 10-fold between 2009 and now, from about 2 Bcf/d to about 26 Bcf/d, “to where the primary limiting factor is getting that gas to market,” he added.

NGL output, to no one’s surprise, has soared to more than 4 MMbbl/d “to where it seems like a new gas processing plant is announced every other week,” Braziel said.

“Unless something totally unexpected happens, we expect U.S. production to keep on growing,” he said. The futures markets indicate U.S. crude production could reach 13 MMbbl/d in five years, and Lower 48 natural gas is headed toward 90 Bcf/d.

Those massive flows will have to “duke it out” and find markets primarily within a Southeast/Gulf of Mexico box where the greatest demand exists, Braziel said. That region, extending from West Texas to Mississippi, and from Oklahoma to the Gulf Coast, will be the site of virtually all demand growth, including new petrochemical plants, LNG and petroleum product terminals and links to Mexico.

“Everyone’s building pipes to get in there,” he said of the region. Braziel added that compounding the supply-demand challenge is that “Rockies gas has only one way to go: east. Ruby [Pipeline] is full and there will be no more capacity.” Another barrier has emerged as the Mexican gas market has not grown as fast as many had expected.

So which basin will win? “The short answer is the Permian,” the economist said, adding LNG exports “are the only significant growth market” for the U.S. and the Permian looks to have the best connections to Gulf Coast liquefaction capacity.

“How will we deal with all this uncertainty? What impact will it have on the Haynesville?” he asked. Braziel said North Louisiana/East Texas shale has the advantage of being close to markets but limited pipeline capacity could hurt prices.

“In 2019, we get a breath of relief as Freeport, Cameron and Corpus LNG come online,” he said of Haynesville gas producers. The improvement could be temporary, however, as new pipeline capacity from the Permian links its Waha hub to the Gulf Coast, providing new competition to Haynesville production, “and in 2021, north-south capacity out of the Haynesville maxes out.”

By 2022, new eastbound capacity out of the Permian will help Waha prices “but the same may not be true of the Haynesville,” he cautioned.

Paul Hart can be reached at pdhart@hartenergy.com.