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My lay understanding is that gas is generally produced as a byproduct of pumping oil.

Consequently, as long as it's profitable to pump oil... more gas will be supplied to the market.

Which means that gas prices will generally be "low" (relative to energy content?) close to oil producers, as it's still profitable to "produce" gas even at low market prices (because you're mainly producing/selling more oil).




This is generally correct, that gas is often a byproduct. Consider the location and availability of gas pipeline and collector/compressor stations. And sometimes when pipelines are present they are already at capacity. It is a fascinating industry that is greening (less flaring, electric drilling).


Yes, for most of us, the cost of natural gas is almost completely transportation costs. The gas itself is only a very small fraction of our bill.




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