At $12 mmbtu which is double the price last year and 4 times the price two years ago why would anybody have a producing gas well capped? It doesn't make sense. Gas wells don't need to be pumped you just open the valve and the gas comes flowing out. The only possible explanation I can think of would be the lack of a pipeline to put the gas into. If the wells are any good the cost of building a pipeline at these prices starts to look insignificant and they can build them unbelievably fast.
I'm in the gas business and we are drilling wells and building pipe here in the Powder River Basin of Wyoming as fast as we can. But they are coal bed methane wells which have marginal economics compared to traditional gas wells. The wells are cheaper because they are shallow but they produce a fraction of the gas of traditional wells and a lot of water needs to be pumped out of the wells with electricity unlike traditional wells that flow on their own pressure. The economics only work when gas prices are quite high. It makes me think we are scraping the bottom of the barrel for natural gas.
Their was an enormous increase in the number of Natural-gas fired turbines for power in the last 7 years.
One of the problems was that building permits were not allowed for new SRU's (Sulfur Recovery Units), Compressor stations, and pipelines. This created a government forced shortage of natural gas. It is beginning to catch up, but the EPA is adding greater strictions all the time.