Most of the increase in domestic onshore natural gas production last year came from some of the smallest producing, or marginal wells, according to a survey by the Interstate Oil and Gas Compact Commission (IOGCC). The survey, scheduled to be released later this month, was previewed Monday at the National Governors Association meeting.

“At a time when demand for natural gas is rising, it is clear that we need look no further than our own backyard for the increase in supply our nation needs,” said New Mexico Gov. Bill Richardson, the IOGCC chairman-elect. Richardson had served as Energy Secretary under Bill Clinton.

Marginal, or “stripper” wells, produce 60 Mcf/d or less of natural gas and collectively represent about 10% of the gas produced onshore in the Lower 48. However, they accounted for 43% of the overall rise in gas production over the past year, according to the IOGCC survey. According to the survey, marginal gas production increased in 2002 by 64,757 MMcf/d to 1.418 Bcf/d. Overall domestic onshore gas production increased by 149,216 MMcf/d to 14.2 Bcf, the survey found.

Richardson said the marginal wells have become an important factor in the U.S. economy. “Marginally producing wells are being produced and maintained not by the major oil and natural gas companies, but by (for the most part) small independent operators — ‘mom and pop’ operations not that different from small family farms,” he said. “They create jobs and economic growth that, while small when taken individually, are significant on a national basis.”

He said research was the “key to the survival of marginal wells. However, these small, independent producers do not have the means to conduct their own research.” He called for Congress to commit to increased funding of research and development through the U.S. Department of Energy’s Office of Fossil Energy.

The complete survey of marginal oil and natural gas wells will be released in the 2003 edition of “Marginal Oil and Gas: Fuel for Economic Growth,” to be released by the IOGCC later this month. For more information on the IOGCC, visit the web site at www.iogcc.state.ok.us.

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