Colorado may approve 38% fewer natural gas and oil drilling permits this year than it did in 2008, the Colorado Oil and Gas Conservation (COGCC) staff said in a report issued on Tuesday.

According to the COGCC, 3,360 applications for permits to drill (APD) had been approved as of Aug. 6. Based on staff estimates, there should be about 5,000 drilling permits approved this year, down from a record of 8,027 approved in 2008. The 2008 APD approvals were 26% higher than in 2007, when 6,368 were approved, commission staff said.

This year’s drilling permit decline “does not correlate with the 60% decline in rig count since the peak of last year but may be a reflection of the push to get permits in before the effective date of the amended rules,” said staff.

The COGCC overhauled the state’s drilling rules in 2008 and the revisions were enacted by the General Assembly earlier this year (see Daily GPI, April 24). All of the rules took effect as of May 1. In June Colorado was the lowest-ranked U.S. state in the Fraser Institute’s Global Petroleum Survey 2009 based on its openness to upstream oil and gas activity (see Daily GPI, June 29).

Last week two GOP members asked the COGCC to extend to two years from one the allowed time to hold an APD, with an option to extend the permit for an additional year after that (see Daily GPI, Aug. 31). The COGCC may consider the request at its regular meeting later this month.

As in the past four years, gas-rich Garfield County in 2009 remains the biggest draw for drilling permits, with 1,247 APDs requested as of Aug. 6, or more than a third (37%) of the state’s total APDs. At this time in 2008 there were 2,888 APDs for Garfield County, and in 2007 there were 2,550 on file.

Weld County was the second highest draw for APDs also for the fourth year in a row, with 904 on file as of early August, compared with 2,340 at the same time in 2008. In early August 2007 there were 1,527 APDs filed for Weld County.

Under an interim policy that took effect on Jan. 5, COGCC does not require environmental reviews for some APDs. Through July 9 COGCC staff said 2,263 permits had been accepted under the interim policy, with more than half (53%) requiring no additional environmental review. Of those requiring additional environmental reviews, 1,006 (44%) were for sensitive habitats, 31 (1%) were for restricted surfaces, 146 (6%) were for riparian area review, and 85 (4%) required a review of drinking water buffer areas.

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