GRAND JUNCTION, Colo.—Colorado’s natural gas industry has suffered because of the length of time it takes to grant permits, prompting companies to focus on drilling in other states, an analyst says.
The industry’s recovery also has been hampered by growing natural gas stockpiles and prices, said Porter Bennett, president and CEO of the research firm Bentek Energy.
The time it takes for permit applications to be processed puts Colorado at a disadvantage, Bennett said Thursday. And Colorado Oil and Gas Conservation rules going into effect this year could lengthen that period.
In 2007, it took about 40 days to get a drilling permit in Colorado, 12 days in Texas and 10 days in Wyoming, Bennett said. In 2008, it was 56 days in Colorado, 19 days in Texas and 12 days in Wyoming.
“Exploration is shifting to other areas,” he told an energy management symposium at Mesa State College.
He said the number of drilling rigs fell 70 percent in a year-over-year comparison in the Piceance Basin in western Colorado, home to trillions of cubic feet of natural gas and some of the country’s largest oil shale deposits.
In comparison, rig counts have risen in Louisiana, where the Haynesville formation is considered one of the largest domestic natural gas finds in years, and in Pennsylvania’s potentially lucrative Marcellus shale formation.
Surface land owners, however, need the protection of the new rules for their property, Grand Junction attorney Nathan Keever countered.
“Some companies are saying the rules are so tough. Well industry, some of you brought this on yourself,” he said.
The government reported Thursday that natural gas stockpiles continue to grow and are now at 16.4 percent above the five-year average for this time of year. Prices fell to seven-year lows this month, which may have attracted investors seeking a bargain.
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Information from: The Daily Sentinel,
