The total value of oil and natural gas produced in Colorado last year was $6.63 billion, a 24 percent drop from 2006, Colorado Geological Survey estimates show.
A dearth of pipelines prevented companies from transporting more gas from Colorado to markets in the Midwest and on the East Coast, which kept the local supply high, petroleum geologist Genevieve Young said. That, in turn, severely depressed prices.
“We had the supply, but we didn’t have the pipelines,” said Young, who compiled the survey’s 2007 oil and gas report. “The lack of export capacity reduced demand, and that’s reflected in the softening of the gas market.”
The agency will release its full report in April.
Colorado set a record $9.39 billion in oil and gas production value in 2005, after hurricanes Katrina and Rita boosted prices of natural gas nationwide.
Since then, weak prices have pulled down production. Total gas production hovered at an estimated 1.132 trillion cubic feet last year, down from 1.198 trillion cubic feet in 2006.
Colorado’s average price of gas was $7.39 per thousand cubic feet in 2005. It was $4.67 per thousand cubic feet last year.
The value of gas — or production multiplied by price — dropped to $5.288 billion in 2007 from $7.345 billion in 2006.
The $4.4 billion Rockies Express pipeline, which opened last month, is expected to push up gas prices as it moves gas from Colorado to the Midwest.
