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Natural Gas Drilling Continues Down in 1Q; Oil Completions Up
Natural gas drilling activity continued its downward slide during the first quarter, while oil well completions rose during the period, according to the American Petroleum Institute’s (API) quarterly well completion report issued this week.
Natural gas well completions fell 26% to 2,175 wells from year-ago levels, the API reported. Meanwhile, oil well completions continued their steady climb, rising 20% to 8,705 wells from the first quarter of 2012. The total number of wells completed in the first quarter of 2013 rose 6% to 12,381 from year-ago levels, the producer group said.
“The oil and natural gas industry expanded oil drilling in the first quarter…thanks in large part to access on private and state lands,” said Hazem Arafa, director of API’s statistics department. “Additional access to our own vast energy resources and streamlined federal permitting would allow for more opportunities to produce U.S. energy.”
Rep. Doc Hastings (R-WA), chairman of the House Natural Resources Committee, echoed this sentiment at a hearing Wednesday. Energy production on state and private lands is flourishing and is at the epicenter of the energy renaissance that the United States is currently experiencing. Oil and natural gas production on these lands has increased dramatically since 2007. Because the restrictions on these lands are not as onerous as the ones on public lands, the average time to get a drilling permit approved is only 12-15 days, he noted.
However, producers seeking to drill on federal lands face a wait time of up to 307 days to get a drilling permit approved, Hastings said. This is nearly double the 154 days that the process took in 2005.
Hastings believes the United States has a tremendous potential for new onshore oil and natural gas production on federal lands, but he claimed that the Obama Administration is actively and purposely keeping these resources off-limits.
He cited what he claimed to be one of the most egregious examples of this occurring earlier this year, when the administration finalized plans to close more than half of the National Petroleum Reserve-Alaska (NPR-A) to energy production (see Daily GPI, Feb. 25). The Obama administration is not only prohibiting energy development in new areas, but actually closing off millions of acres in an area that were specifically set aside for energy production, Hastings said. The NPR-A has a potential of more than 2.7 billion bbl of oil and 114.36 Tcf of natural gas.
The administration also is planning to release a proposed rule on hydraulic fracturing (fracking) on federal lands. This would be another layer of red tape and bureaucracy because states have been successfully regulating fracking for decades, Hastings said. Before leaving the Interior Department last week, former Secretary Ken Salazar indicated that a final rule on fracking is imminent from the Bureau of Land Management.
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