Hey Riffy,
Time to check your facts. Oil companies have been given a recordnumber permits to drill in the last few years. Many of the oil companies are sitting on the permits without using them. The facts contradict the corporate news talking points!
MM
Check this out:
http://www.dnj.com/apps/pbcs.dll/article?AID=/20080612/NEWS01/80612033/1002Gordon: Oil companies should use drilling permits or lose them
WASHINGTON – In an effort to provide relief to consumers struggling to cope with high gas prices, U.S. Rep. Bart Gordon is urging Congress to require oil companies to use their drilling permits or lose them.
Gordon cites a report from the U.S. House of Representatives Committee on Natural Resources that says the federal government has issued thousands of leases that oil and gas companies are not using to drill on public land. According to the report, it is estimated from today’s production rates that the 68 million acres of federal land that is leased but not drilled could nearly double total U.S. oil production and could increase gas production by more than 50 percent.
“If companies used the permits they are holding and increased domestic production, the United States could cut oil imports by one-third,” said Gordon. “Congress needs to send a message to oil companies and tell them they can’t just stockpile leases to artificially inflate oil prices. We need legislation that will force companies to use their drilling permits or lose their leases and let someone else drill on that land.”
Gordon said he is hopeful that legislation will be introduced in the coming weeks to require the “use it or lose it” stipulation on drilling permits.
Even in Nebraska:
http://www.omaha.com/index.php?u_page=2798&u_sid=10359778 Oil drilling permits in Nebraska are at 20-year high
BY LESLIE REED
WORLD-HERALD BUREAU
LINCOLN — With a barrel of oil over $134 and natural gas prices doubling in five years, western Nebraska is seeing its biggest spurt in oil and gas well drilling since the early 1980s.
The number of drilling permits issued by Nebraska is at its highest level in 20 years.Bill Sydow, director of the Nebraska Oil and Gas Conservation Commission in Sidney, said Nebraska has issued more than 40 new well permits a month for the past two months.
"The last time that ever happened, there were over 600 wells drilled, in 1981. We're not going to get to 600 this year, but we have to go back more than 20 years to see any activity levels like that on a monthly basis," Sydow said.
Nebraska showed small increases in both oil and gas production last year. It also issued 238 permits for new oil and gas wells, about two-thirds of them for natural gas. So far this year, 108 permits have been issued and an additional 16 requested.
The wells are being drilled on land owned by area farmers and ranchers by relatively small independent drilling companies who lease oil and gas rights from the landowners.
Some landowners said the past few years have sparked exploration activity at levels they haven't seen in decades.
Stan Jones, a Benkelman farmer, rancher and crop sprayer, said he has had natural gas leases and two nonproducing wells on his property for 40 years. Late in 2006, Houston-based Noble Energy asked to drill.
The new wells were in production by March 2007. Jones now has about two dozen wells producing natural gas. Most private landowners collect a 12 percent royalty on production.
"They're exploring quite a bit of ground, of mine and the neighbors," Jones said of Noble. "I think it's going to be good for southwest Nebraska."
Scott Olson, a Haigler farmer and Dundy County Board member, hadn't leased mineral rights on his land for 25 years. Noble now is paying $13.50 per acre for five years to lease mineral rights on his land.
David Larson, vice president of investor relations for Noble Energy, said the company has assembled mineral rights to drill for gas on about 300,000 acres in Chase, Dundy and Perkins Counties in southwest Nebraska.
Natural gas is measured in quantities of a thousand cubic feet, or "Mcf," and Nebraska production in 2007 was 1,400,326 Mcf, its highest level since 1995. The state's record year for gas production was 1962, with 8,835,000 Mcf.
Nebraska ranks in the mid-20s among the states in both oil and natural gas production, according to statistics from the Energy Information Administration and the Interstate Oil and Gas Compact Commission.
That output is dwarfed by oil giants such as Texas, which in 2006 produced 344 million barrels of oil and 5.5 billion Mcf of natural gas.
Nebraska's oil history dates to 1939, when the first producing well was drilled in Richardson County, said Marv Carlson, research geologist at the University of Nebraska-Lincoln. That area continues to see one or two new oil wells a year.
Nebraska oil production peaked in 1962 at nearly 25 million barrels. It had declined to 2.31 million barrels in 2006.
But in 2007, oil production rose slightly — to 2.33 million barrels — the first increase since 1989. The state now produces about 6,000 barrels of oil a day, Carlson said.
Iowa had no oil or natural gas production. Kansas reported 36.1 million barrels of oil and 438,000 Mcf of natural gas. Colorado produced 22.9 million barrels of oil and 1.2 billion Mcf of natural gas.
Total domestic U.S. production now is about 4.8 million barrels a day, about half the 1971 peak of 9.4 million per day, Sydow said.
The total number of producing oil wells in Nebraska has held steady for the past several years, while gas wells have increased. There were 1,187 producing oil wells in 2007, compared with 1,182 in 2005. There were 197 natural gas wells, compared with 96 wells in 2001.
Bruce Evertson, a Kimball, Neb., "wildcatter" who explores for oil and gas, said there's a good supply of high-quality sweet crude oil beneath the Panhandle and southwest Nebraska — but dense rock formations make it difficult to recover because there is not enough pressure to force it through the rock.
He said it likely would cost millions to drill a high-tech well that would recover only about 20 barrels a day because of the low pressure.
"We found a lot of oil, but it's not recoverable using today's techniques," he said.
Evertson Operating Inc., a 24-year-old company, has been the largest oil producer in Nebraska for the past four or five years. Evertson said his company pumps 1,500 barrels a day in Nebraska. It has operations in several other states as well.
While Colorado, Utah and Wyoming have more oil than Nebraska, they also have more regulatory requirements, Evertson said. He said an industry-friendly attitude from Nebraska regulators, combined with rising oil prices, have increased interest in Nebraska oil.
David Nicklas, president of Vista Oil & Gas Inc. of Pittsburgh, said his company has drilled about 50 natural gas wells in the Sidney area since 2002 and plans to drill another 30 to 40 a year for the next four or five years.
He said the Nebraska natural gas field is on the edge of a higher-quality area just over the state line in Yuma County, Colo.
"That's what led us to Nebraska," Nicklas said. "We thought we might be able to make the fringe area work."
Sydow said Noble has about 90 producing gas wells in the "Chundy" area — straddling the border between Chase and Dundy Counties. The company has 15 other wells awaiting completion and permits to drill 74 more.
Nebraska's oil and gas reserves can contribute only incrementally to the nation's effort to reduce its reliance on foreign fuel, but every little bit helps, Noble's Larson said.
He said natural gas fields in northeast Colorado, southwest Nebraska and northwest Kansas are a small but growing part of his 75-year-old company's operations.
Larson said Noble probably would drill 150 wells in Nebraska this year. It may sound like a lot, but that is because the natural gas reserves, although plentiful, are shallow and low-producing. Noble is drilling wells that are about 2,200 feet deep, compared with perhaps 8,000 feet for a more typical gas well.
But shallow wells are cheaper to drill — and advances in technology have allowed the company to find natural gas in about 90 percent of the wells it has dug.
Shit even three year ago they were issuing record number of drilling permits:
http://www.washingtonpost.com/wp-dyn/content/article/2005/04/27/AR2005042701946_...Gas-Drilling Permits in Rockies Outstrip Ability to Tap Resource
By Blaine Harden
Washington Post Staff Writer
Thursday, April 28, 2005; A03
PINEDALE, Wyo. -- As energy companies and Bush administration officials have long told the story, lack of access to federal land is the primary roadblock for increased production of natural gas in the United States.
The Independent Petroleum Association of America made this familiar claim in February at a congressional hearing. Similarly, Vice President Cheney said last year that because of unjustified federal limits on drilling, "large parts of the Rocky Mountain West are off-limits."
The lack-of-access story, however, does not square with what is happening on the ground here at the epicenter of what is widely being called the largest boom in gas drilling on federal land ever in the Rocky Mountain West.
In response to White House orders to expedite gas extraction on federal lands, the Bureau of Land Management has issued more gas-drilling permits in the West than the industry has rigs to drill with or workers to operate the rigs, according to government records, industry experts and local officials.
The BLM issued a record number of drilling permits last year, but the gas industry is struggling to keep up, with the number of completed wells flat or declining over the past three years.
"Around here, I don't even hear that argument about access anymore," said Prill Mecham, field manager for the BLM in the Pinedale area, which she said contains more gas in a smaller footprint than anywhere in the West. "The companies are clear where they need to drill, and they have access to all these areas."
Several of the energy companies operating in the Pinedale area -- where there is an estimated 35 trillion cubic feet of natural gas, about 11 times the total amount produced annually on all public land in the United States -- are unreservedly bullish in their reports to shareholders about prospects for high-profit, long-term access to gas. "Ultra's well economics are robust," says a company profile by Ultra Petroleum Corp. of Houston, one of the major operators here.
With a record number of gas-drilling rigs now operating in the West, industry analysts say, energy companies have all but exhausted available drilling equipment in North America. Because delivery on new rigs can take a year or more, the industry is not expected to catch up in the near future to the drilling permits that have already been issued by the federal government.
"Large drilling contractors are operating at full utilization," said Byron Pope, an analyst for Pickering Energy Partners Inc., a Houston-based energy research firm. "Don't expect to see a massive wave of more drilling."
There is also an acute shortage of gas-field workers. Here in Wyoming, which leads the West in gas drilling on public land, an industry-sponsored school was opened last month in Casper to train needed roughnecks. Its director, Charlie Ware, said energy companies have "told us that they need 1,000 new workers a year for the next five years to drill the leases that are out there right now."
In New Mexico, where gas drilling on public lands is also booming, Bob Gallagher, president of the state oil and gas association, agreed that the industry has temporarily run out of capacity: "If we had the availability of equipment and labor as we speak, you would see more crews working, more wells being drilled."
Gallagher and other industry experts say that the federal government must continue to lease more land for drilling because older gas fields are drying up, dependence on foreign supply is increasing and consumer appetite for gas continues to surge.
As industry scrambles to catch up with existing drilling permits, state and local governments across the Rocky Mountain West, as well as a number of local and national environmental groups, are becoming increasingly concerned -- and in some cases, outraged -- about the environmental and social consequences of increased gas production on federal land.
"When you have a huge portfolio of unused leases, why does the Bush administration continue to issue more, especially in environmentally fragile areas?" asked Dave Alberswerth, who analyzes energy exploration on public lands for the Wilderness Society.
Responding to these concerns, John Wright, a spokesman for the Interior Department, said: "We only lease in areas on public land where there is gas and where we can do it in an environmentally sensitive manner. More important, these decisions are based on land management planning, which is a public process."
Much of the recent grumbling about gas drilling in the West, however, comes from ranchers who say their rights as owners have been trumped by federal mining law.
They complain about the "split-estate." Many ranchers in the region own only surface rights to their land, while the BLM owns sub-surface mineral rights. Oil and gas companies can lease those mineral rights from the BLM and operate on a rancher's land, building roads and drilling wells, even without the rancher's permission.
In an unprecedented response to constituent anger over the split-estate, five state legislatures -- in Wyoming, Montana, Colorado, North Dakota and New Mexico -- this year considered laws to protect and enhance the rights of surface owners in disputes with energy companies. Wyoming was the one state to enact such a law (in Montana and Colorado, bills were narrowly turned back).
The Wyoming law calls for negotiations on damage payments, requires land reclamation when drilling is done and spells out rules for mediating disputes. In the other four states, similar or tougher laws are likely to be considered again next year, said Kevin Williams, a field organizer for the Western Organization of Resource Councils, which coordinates local land-use groups.
"It's about polluted water, it's about noise, it's about dust," Williams said. "A lot of people are angry, and this is not going to die down."
Here in the Pinedale area, a report by the Wilderness Society says that the rapid pace of drilling is damaging "a wildlife resource of national significance." The report says that road building associated with drilling has fragmented winter habitat for some of the West's largest and longest-migrating herds of pronghorn antelope and mule deer, while reducing breeding and nesting areas for the sage grouse, a bird many experts regard as threatened.
Local BLM chief Mecham concedes that intensive gas drilling and road construction in the Jonah Field near Pinedale in the past four years has caused some environmental damage, especially to habitat for the sage grouse.
According to Wyoming Gov. Dave Freudenthal (D), that is an understatement. In a recent letter to Mecham, he said the Jonah Field is an "example of what not to do in the future." Surface disturbance from roads, wells and pipelines is so great, he wrote, that any measure to mitigate the damage would now be a "futile attempt to 'perfume the pig.' " In an interview at her office here, Mecham said that "there are lessons to be learned from Jonah" and that the BLM is now in a better position to control the drilling that has begun in a nearby gas field, called the Pinedale anticline, where there are winter herds of pronghorn and mule deer.
Many local residents, having witnessed the frantic pace of drilling in the past four years, are less sanguine.
"The country needs this energy, but it is insane what happened at the Jonah Field, and there is still no development plan for the Pinedale anticline," said Gordon Johnston, a Bush supporter and former Marine who until January was a Republican county commissioner in Sublette County, which includes Pinedale.
Asked whether he believes the BLM will now ride herd on the gas companies and protect wildlife in the Pinedale anticline, Johnston smiled sadly.
"There is not a doubt in my military mind," he said. "That will not happen."
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