Oil and gas permits dip for 5th straight year in Moffat County | CraigDailyPress.com

Oil and gas permits dip for 5th straight year in Moffat County

Brian Smith

Since reaching a high not seen since at least 1988, oil and gas permitting in Moffat County continues to decline.

In 2006, a high of 120 oil and gas permits were issued, but in recent years, the number of drilling permits in the county has been dropping.

In 2007, 68 permits were issued, a number that dropped to 57 in 2008 and 51 last year.

Through mid-November this year, 48 permits have been issued.

However, according to statistics, Moffat County's permitting isn't necessarily indicative of statewide trends.

Oil and gas permitting across the state picked up after a slow start earlier in the year and looks to be on track to exceed last year's activity and other past permitting years.

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According to the Colorado Oil and Gas Conservation Comm-

ission, through mid-November the state has issued more oil and gas drilling permits than all of 2009.

So far, a total of 5,500 permits have been approved in Colorado, a slight rise from last year's 5,159.

Larry Coler, a permit technician with the Colorado Oil and Gas and Conservation Commission, said many factors could be contributing to the rise of permitting activity in oil and gas drilling on a state level.

"It seems like we are a little more efficient than we have been in the past and maybe that combined with the oil prices and their technological breakthroughs and the horizontal drilling being something new and exciting for the operators — combine all those things and that has a lot to do with it," he said.

David Ludlam, executive director of the West Slope Colorado Oil and Gas Asso­ciation, agreed, adding the Western Slope's natural gas operators have "always had confidence in the region's clean, robust natural gas resources."

"It's other factors like price, regulatory certainty and elections that can impact confidence," Ludlam said in an e-mail. "Of those three factors, all but price have recently shifted more favorably for Western and Northwestern Colorado's natural gas business."

Coler said natural gas companies might be permitting wells now and waiting for the price of gas to rise before beginning to drill.

Ludlam said advantages in technology and drilling efficiencies have allowed many operators in Northwest Colorado to continue drilling through "challenging natural gas prices."

However, Coler said, the same might not be true for oil companies, considering the price of oil is currently around $88 per barrel.

"That's pretty good, but I don't think gas (price) is too good," he said. "Gas (price) isn't good enough that the activity has dropped off — they might be permitting a lot of wells out there but I don't think they are drilling a lot. We are not seeing a lot of the forms come through that deal with the completion of the well as much in the Western part of the state as the Eastern part of the state."

Ludlam agreed.

"Basins with lots of oil, like the Niobrara formation, are attracting much of today's operating dollars," he said. "So, it's true that the high price of oil is playing a role in the robust permitting activity."

Coler said one of the efficiencies that might be spurring the permitting activity is the reduced time it takes his department to process a permit application.

A process that used to take three or four months has been reduced to about three weeks, he said.

"That's all that I can see is that they know that the oil prices are up and they know that we can get a permit out to them quicker," he said. "I think they can plan better than they have been able to before as far as when they are going to have a permit in hand, and their drilling schedules can be planned out with a little more accuracy in the future."

Coler said he thinks final 2010 permitting statistics will show there is strong permitting interest in Colorado, and things could look brighter for the industry.

Next year could see permitting activities continue to rise, Coler said.

"Right now we are in a low … but I have been told things are going to pick up and if that's the case, we could probably exceed one of the other banner years," he said.

Oil and gas permits

Annual oil and gas drilling permits:

Moffat County:

• 2010 — 48

• 2009 — 51

• 2008 — 57

• 2007 — 68

• 2006 — 120

Rio Blanco County:

• 2010 — 421

• 2009 — 348

• 2008 — 477

• 2007 — 321

• 2006 — 360


• 2010 — 5,500

• 2009 — 5,159

• 2008 — 8,027

• 2007 — 6,368

• 2006 — 5,904

Note: 2010 statistics are through Nov. 19, and the latest available. All information provided by the Colorado Oil and Gas Conservation Commission.