Colorado drilling permits on rise
September 28, 2008
GLENWOOD SPRINGS ” The surge of drilling permits in Colorado is continuing to spiral upward.
Current records from the Colorado Oil and Gas Conservation Commission, which approves all new wells in the state, showed that the state has approved 5,216 drilling permits as of Sept. 8 ” continuing the boom of energy development the state has seen since 2000, when the state issued only 1,529 permits. The COGCC issued 6,368 drilling permits last year.
However, an increase in permitting activity does not necessarily translate into an immediate increase in drilling activity. In fact, some companies are now applying for permits for drilling activity next year.
Garfield County is also continuing to see a surge in permitting. From Jan. 1 to Sept. 8, the state issued 1,957 permits for wells in Garfield County.
Last year, the state approved 2,550 permits. In 2006, the COGCC issued 1,844 drilling permits for Garfield County.
Dave Neslin, acting director of the COGCC, said the agency issued about 621 drilling permits a month from March to May ” a time when state regulators issued draft oil and gas rules. The proposed rules for the state’s oil and gas industry have generated enormous controversy across the state.
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The number of permits issued across the state increased from June to August, when the COGCC issued about 763 drilling permits for wells in the state.
That could mean the state agency is on track to issue well over 7,000 permits this year, Neslin said.
“The industry has never been stronger in the state, either in terms of number of drilling rigs, the number of drilling, the number of drilling applications, the number of permits issued,” Neslin said earlier this month.
Doug Hock, a spokesman for EnCana Oil and Gas (USA), said the prospect of the new rules has played one part in the company’s plans in applying for drilling permits in the state. But it is largely a growing delay in receiving permits ” mostly because of a short-staffed COGCC ” that is leading the company to seek more permits at one time, he said.
“We used to see permits in 30 days on average, it is more like 60 days now,” said Hock, adding the company has hired more staff to submit permit applications to the state. “We already submitting APDs for our 2009 program so we can get ahead of the curve.
The COGCC is expected to meet again in late September to discuss pit and waste rules. The commission could be in a position to approve new rules for the state’s oil and gas industry by early December.