One-fourth of US drilling permits is unused

Apr 16, 2004 02:00 AM

Roughly a fourth of oil and gas wells with permits approved by the Bureau of Land Management have not been drilled, despite skyrocketing oil and gas prices that have prompted Republicans in Congress to demand more access by oil companies to public lands.
More than 7,000 oil and gas wells that received permits in the last 10 years have gone untouched, prompting conservationists to question why the Bush administration has been advocating opening new land to drilling and streamlining the permit process.
"No one is saying we shouldn't be drilling out West. But this surplus raises the question of why there's a rush to open some very sensitive areas to drilling, including areas that have been proposed for wilderness protection," said Michelle Haefele, an economist with The Wilderness Society.

The BLM recently auctioned off new oil and gas leases along the Utah-Colorado border that included areas identified for possible wilderness protection. Another lease sale is scheduled in Colorado next month for lands that environmentalists say should also be protected.
However, Andrew Bremner, director of government affairs for the Independent Petroleum Association of the Mountain States, said there is a certain amount of guesswork in oil and gas drilling. Producers seek permits for an area where they suspect there may be oil or gas, but they don't know which wells will produce until drilling starts.

At a cost that can reach $ 1.5 mm per well, permits unlikely to succeed are abandoned.
"It's such a dynamic process and we have all the technology on our side, but there's still a sliver of educated guessing," Bremner said. "It would be simplistic to say we're not drilling as many wells as we want to."
He said if BLM could assure permits would be processed in a timely manner, producers wouldn't have to apply for so many at once and fewer would go unused. The BLM is supposed to process permits in 30 to 35 days, but a review of thousands of applications showed it took the BLM an average of 89 daysover the last three years. The review also found that the Bush administration has approved wells at a rate that is 34 % higher than during the last three years of the Clinton administration.

BLM figures obtained by The Wilderness Society show that, over the last decade, 25 % of permitted wells are not being drilled. The percentage of wells not being drilled has remained relatively steady, but as the number of wells permitted has increased more wells have gone undrilled.
According to BLM figures, it costs the bureau about $ 3,800 to process a drilling application. The Bush administration and BLM have made oil and gas production in the Rocky Mountain West a top priority. Last August, the BLM issued new policies aimed at removing impediments to oil and gas leasing. The Republican-backed energy bill that is stalled in Congress seeks to provide additional money to speed up the permitting process for oil and gas wells.

In April 2001, Vice President Dick Cheney's energy task force made a goal of removing restrictions to energy development in the region, which it said placed off limits 40 % of the natural gas in the Rockies.
Estimates by the US Geological Survey released in January identified 3.9 bn barrels of recoverable oil and 139 tcf of natural gas on federal lands in five prime Western ranges. It noted that all but 15 % of the land was open to drilling without significant restrictions.

Source: The Associated Press
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