While total U.S. dry natural gas production fell 3.2% last year to about 19.1 Tcf, according to the Energy Information Administration, gas production from onshore marginal wells producing 60 Mcf/d or less actually rose by about 65 MMcf/d, according to a preview of the Interstate Oil and Gas Compact Commission (IOGCC) annual survey.

The survey titled “Marginal Oil and Gas: Fuel for Economic Growth,” which is scheduled to be released this month, shows that marginal gas wells that collectively represent 10% of the natural gas produced onshore in the lower 48 states accounted for 43% of the overall rise in onshore natural gas production over the last year. Marginal natural gas production increased in 2002 by 64.6 MMcf/d to 1,418.3 MMcf/d. Overall domestic onshore natural gas production increased by 149.2 MMcf/d to 14,262.9 MMcf/d, the IOGCC report said.

“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. The IOGCC released a preview of its annual survey at the National Governors Association (NGA) meeting.

Richardson noted that marginal wells are an important factor in the nation’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,” Richardson said. “They create jobs and economic growth that, while small when taken individually, are significant on a national basis.”

Marginal oil production increased last year by 7.7 million bbl/d to 323.8 million bbl/d. Overall domestic onshore oil production declined, however, by 28.9 million bbl/d to 1.1 billion bbl/d.

“Research is the key to the survival of marginal wells. However, these small, independent producers do not have the means to conduct their own research,” Richardson said. 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 IOGCC represents the governors of 30 oil and gas producing states.

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