Familiar themes continued to resonate at last week’s IPAA investor conference in New York:  Liquids rule, natural gas is in the tank and likely to be there for a while, frac crews are hard to come by, and takeaway/processing issues are everywhere. One of the more interesting comments heard at the conference pointed to the industry putting another 200 rigs to work this year, followed by another 200 rigs in 2012.

Generally, The Land Rig Newsletter team believes the winds are blowing in a positive direction for adding rigs—relatively high oil prices driven by strong global demand and political instability in the Middle East. However, crosswinds from known—as well as unforeseen—sources will likely take some of the wind out of the sails, causing one to remain somewhat skeptical of such robust growth. Whether it’s the Rockies, Midcontinent, or Appalachia, it’s the same story:  Plays are more complicated than commonly thought, frac crews are in short supply, and takeaway constraints are either present or near.

Some analysts have noted the continuing decline in the U.S. gas rig count this year fitting their thesis of higher gas prices this year. Yes, the overall gas rig count has fallen by 9.3% since yearend 2010. But the combined number of natural gas-directed rigs in the major shales and tight sands plays has fallen only 5% this year and only 3% since midyear 2010, notes The Land Rig Newsletter’s Unconventional Drilling Report.

There is other evidence pointing to persistent underestimates of forecast gas production growth from the unconventionals. The Haynesville dropped 16 rigs in the last 3 months that it added 500 MMcfd to production. It’s time to rethink the widely assumed 6-month lag time between rig count decline and production decline. In addition, Eagle Ford gas production jumped fourfold in 2010 from 2009-pretty impressive for a play touted for its liquids. Look for unconventional gas output to expand continue expanding this year even as its rig count falls. If gas prices rise this year, it won’t be because of a production drop.

Is it too soon to talk about a persistent gas bubble attenuated by unconventional gas drilling? EIA thinks the U.S. gas market will tighten by 2012. The agency expects Lower 48 gas production to decline modestly through 2011 because of a falling gas-directed rig count in response to lower prices.

The Land Rig Newsletter team has a different view: Thanks to unconventional gas drilling, U.S. gas output increased by 2.6 Bcfd last year despite a plunge in gas prices and a peak-to-trough drop of almost 6% in the overall gas rig count. That suggests the disproportionate contribution of unconventional gas drilling to U.S. gas output. And there is more gas to come, from a persistent completions backlog to growth in new liquids-rich plays that some may forget also add to the gas production column despite all the hoopla about liquids. Deregulation was the catalyst for the gas bubble that persisted from the late 1980s through the 1990s. The ascent of unconventional gas is equally revolutionary and equally likely to re-create that persistent gas bubble.