Drilling permits on track to nearly reach 2007 levels | PostIndependent.com

Drilling permits on track to nearly reach 2007 levels

Pete Fowler
pfowler@postindependent.com
Glenwood Springs, CO Colorado

GLENWOOD SPRINGS, Colorado ” Applications for drilling permits are on track to nearly reach 2007 levels, but the figure could be an anomaly as oil and gas companies tried to obtain permits before new rules take effect.

“There is a significant decrease in rigs that are operating,” said Garfield County oil and gas liaison Judy Jordan. “In context that’s pretty comparable with what we’ve seen in terms of decline across the country and in Canada.”

Recent U.S. rig counts are down about 44 percent from a year ago. Colorado’s rig count is down 55 percent. Wyoming is down 37 percent. Canadian rig counts are down over 60 percent. Most energy industry operators have reported a decrease in drilling locally, with about 23 rigs running compared to about 72 last summer. Operators are focusing on infrastructure development so they will be ready to ramp up drilling when the price of natural gas recovers, Jordan said in a quarterly report to Garfield County commissioners.

She said activity on the Marcellus Shale formation in New York, Pennsylvania, Ohio and West Virginia is about the only area that has not experienced a decline in drilling activity. She said it’s a recently proven source of natural gas already connected to large nearby markets, and it doesn’t have the topographical challenges present in the Piceance Basin.

However, she said not all the statistics for Garfield County are looking as bad as drill rig counts, and rig counts may not be as bad as they appear. Jordan presented the information to county commissioners at a meeting Monday.

There have been 591 applications for permits to drill approved by the Colorado Oil and Gas Conservation Commission (COGCC) in Garfield County in the first three months of the year. If permitting kept going at that rate, there would be about 2,364 permits issued in 2009, which is nearly as many as were issued in 2007.

“But this first quarter is probably anomalous because everybody’s probably trying to get their APDs before the rules go into effect,” Jordan said.

Drilling related complaints in the county for the first quarter this year are also lower at a total of 14. Jordan said that’s to be expected with drilling activity down.

As of last month, Garfield County had 465 drilling permits approved ” 37 percent of Colorado’s total. The county had 5,673 active wells out of 37,785 in Colorado.

Jordan said a number of operators have submitted comprehensive drilling plans contemplated in new COGCC rules. Most attempt to define anticipated drilling activity for about five years into the future, which helps the county to better plan its own infrastructure and know about things like which roads will be affected.

An approved drilling plan also allows operators to avoid submitting paperwork on a site-by-site basis and will accelerate the COGCC’s processing time for drilling permits, Jordan said.

Contact Pete Fowler: 384-9121

pfowler@postindependent.com


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