Drilling requests pile up in Garfield County

RIFLE, Colo. Requests for drilling permits in Colorado continue to surge, according to updated figures from the Colorado Oil and Gas Commission.The pace of drilling permit applications in the state so far this year is about 20 to 25 percent ahead of where it stood last year, said Dave Neslin, acting director of the commission, who spoke at the Northwest Colorado Oil and Gas Forum meeting in Rifle on Thursday.The state has received about 2,933 applications for drilling permits so far in 2008, with 1,029 of those permits for wells in Garfield County.Last year, the state processed 6,368 drilling permits. If the level of activity that has occurred already this year continues through the remainder of the year, the state expects to receive about 8,000 permit applications to drill, Neslin said.

About half of all the ongoing permitting activity is occurring in the Piceance Basin, Neslin said.The fast pace of permitting continues even as the state considers new rules for the states oil and gas industry. Some legislators and others have said companies might start to invest in other states because of the rules.The creation of new rules are a result of house bills 1298 and 1341, which the state Legislature passed last year. They required that the commission expand its focus to consider public health and wildlife impacts, and require the use of best management practices to minimize harm from oil and gas development.Rep. Al White, R-Hayden, spoke before the Northwest Colorado Oil and Gas Forum meeting on Thursday and asked for a show of hands from company representatives to see if the proposed rules have them altering their investment plans for the state.White is currently running for the State Senate District 8 seat.I have heard numbers of billions of dollars been re-allocated outside of Colorado, White said.A few hands went up after White asked his question. However, Steve Soychak, district manager for Williams Production RMT, said it was too early to tell what the rules might have on his companys investment plans.Williams Production has plans to drill 500 wells in Rio Blanco and Garfield counties this year and has plans to drill another 500 wells in the two counties next year, Soychak said. However, Soychak said the company is going to assess what effect the new rules for the state oil and gas industry might have on the companys operations and determine if that is going reduce (its) activity at all.EnCana Oil & Gas (USA) has already reduced its drilling activity in the area in the shadow of the new rules. The company drilled 295 wells in 2007 and plans to drill 224 in the area this year, said David Grisso, operations field leader for EnCana in Parachute. That reduction is partly tied to the current rule-making process, company representatives have previously said.The company has taken a pool of $500 million in capital expenditures for this year and is spending it in Wyoming and Texas, rather than Colorado, because of the states current regulatory environment.