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Annual gas revenues near $1 billion

Dennis Webb

Oil and gas development in Garfield County still may be in its infancy. But judging by the numbers, it’s already going gangbusters.In terms of annual production value, at nearly $1 billion, it’s already nearly half the size of the entire Colorado ski industry, and two-thirds the size of the state’s hunting and fishing industry.About half of the nearly 70 drill rigs in the state are drilling here.Last year, 566 permits were issued for new wells in the county. This year, more than 600 permits could be issued, said Brian Macke, deputy director of the Colorado Oil and Gas Conservation Commission.As of mid-April, 204 already had been issued, he said. At that pace, the annual total could reach 700.”I’d say at least 650,” Macke said.”That’s a lot, isn’t it?” he added.The amount compares to 362 permits issued in 2002, 353 in 2001 and 213 in 2000. A total of 1,372 permits were issued in the county from 1991 to 2001.Garfield County oil and gas auditor Doug Dennison agrees this year’s permits could reach 700. That compares to just more than 20,000 gas wells drilled nationwide in 2001.The county trend is in keeping with statewide permit numbers. Last year, 2,245 oil and gas well permits were issued in Colorado, probably about 85 percent for gas, Macke said. This year, the number could hit 2,600.COGCC records since 1964 show the previous modern-day high was back during another energy boom, in 1981, when 2,378 permits were issued.”We fully anticipate that it will break that record” this year, Macke said.Garfield County accounted for a full quarter of all permits issued in the state last year. Weld County, which includes Greeley, led the state, with about a third of all permits – 756.Garfield County is beginning to rival Weld County in drilling activity. As of early April, 68 rigs were drilling statewide, 33 of them in Garfield County. Only half as many were active in Weld County.Almost as many rigs are drilling in Garfield County now as were drilling in the entire state as of early 2003.The results of all that drilling are speaking for themselves. In the year after the county hired Dennison to fill his newly created position, gas production in the county almost doubled, from 280 million cubic feet to about 500 million cubic feet per day, he said.Ken Wonstolen, senior vice president of the Colorado Oil & Gas Association, puts the figure closer to 600 million cubic feet per day.Last year, the county produced 145 billion cubic feet of gas – enough to heat at least 1.13 million homes for a year, according to industry estimates. If 20 trillion cubic feet were ever recovered in the Piceance Basin, as the state Geological Survey says might be possible, it would be enough to heat 155 million homes for a year, and perhaps as many as 250 million homes.The county produced about $254 million worth of oil and gas in 2002, with almost all of that consisting of gas, according to the state.But gas production in the county and state have soared since then, in volume and value.In 2002 the state’s annual oil and gas production was worth about $2.74 billion, with 83 percent of that consisting of gas production. Thanks to more drilling and rising natural gas costs, the state’s gas production is now worth $5 billion, “which is twice the size of the entire ski industry,” Wonstolen said.”That’s huge, that’s huge.”Colorado’s ski industry generates revenues of about $2 billion a year, according to Colorado Ski Country USA. The state Division of Wildlife estimates that hunting, fishing and wildlife-watching generates $1.5 billion in direct and indirect revenues each year.Colorado’s gas production is the sixth-highest in the country. Garfield County is playing a large part in the state’s natural gas boom. Its production value is now pushing close to $1 billion a year, said Randy Udall of Carbondale, director of the Community Office for Resource Efficiency, an Aspen-based nonprofit office that promotes renewable energy and energy efficiency.That’s bigger than had been forecast for the oil shale industry during its boom, he said. That industry had been expected to produce $550 million in oil per year, said Udall.He cites an Oil & Gas Journal article that indicates the richest parts of the Rulison gas field, part of the Piceance Basin, may yield $500 million per square mile, or almost a million dollars per acre.In terms of production, Udall said, the Piceance Basin gas field is now about the 10th-largest in the entire nation.Over the next half century, Udall estimates, gas companies are likely to produce $50 billion worth of gas in Garfield County.That would be 100 times what it cost, in early 1990s dollars, to build the Glenwood Canyon Interstate 70 project.Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com


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