With the stimulus of the state’s electricity and natural gas crunch lingering, the pace of new natural gas well drilling in the northern half of California has nearly doubled over last year, according to state officials. Notices to drill new gas wells are coming in at a pace not seen since the mid-1980s, and the total for any single year in the 1990s will soon be surpassed.

State officials cautioned that all of the new drilling is unlikely to put much of a dent in the amount of natural gas the state imports, however. California produces about 1 Bcf/d in the state — ranking it 10th in the nation — but uses more than six times that amount, with most of the gas coming from major basins in the Southwest, Rockies, and Canada. California natural gas production dropped between the mid-1980s and the early 1990s, falling off sharply in 1992. Production has risen slightly of late, led by Stream Energy Inc. in the Todhunters Lake gas field in Yolo County, and Calpine Natural Gas Co. in the Rio Vista field.

Most of the natural gas produced in-state comes not from gas wells, but as a byproduct of oil production. The Elk Hills oil field in Kern County accounts for 40% of the state’s natural gas production.

As of Aug. 31, the state Department of Conservation (DOC) records show that its Division of Oil, Gas, and Geothermal Resources’ office in Sacramento had issued 178 permits to drill new wells in 10 counties in and around the Sacramento Valley, an area historically dotted with sizable dry gas fields, two of which are now serving as sites for the state’s first two merchant underground gas storage fields.

At the current rate, DOC officials reported Tuesday, 267 notices will be filed by the end of the year, compared to 137 in 2000. Drilling activity in the previous decade ranged from 187 permits issued in 1990 to only 78 in 1995.

Most of the new activity is taking place in proven gas fields, which contain about 900 active wells. In some cases, such as the Denverton Creek field in Solano County, field boundaries are being extended when the new well drilling proves successful. In other cases, such as the Willows-Beehive Bend field in Glenn County and the Rio Vista field, operators are drilling deeper within existing field boundaries.

In March 2001, Gov. Gray Davis directed the state’s Secretary for Resources, Mary Nichols, to form and chair the multi-agency natural gas working group to closely monitor supply, demand and price. The group also facilitates gas projects throughout the state.

“I congratulate our gas producers for their rapid response to California’s pressing energy needs,” Nichols said. “The latest figures on in-state natural gas drilling show that California is making progress to increase our native sources of energy production.”

Quoting NGI’s Weekly Gas Price Index, state officials said that last January what it called the “fair market price of gas was $14.32 /Mcf, and soared into the $50-$60 range in the spot market. Currently, gas sells for about $3.40/Mcf, and the spot-market price has at times dipped below $3.”

Situated within the Resources Agency, DOC regulates California’s oil, natural gas and geothermal wells; studies and maps earthquakes and other geologic phenomena; maps and classifies areas containing mineral deposits; and ensures reclamation of land used for mining among other land-use regulation activities.

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