Calling a natural gas shortage in the coming year “a very realpossibility,” Dr. Bruce M. Bell, chairman of the Mid-Continent Oil& Gas Association of Oklahoma said there is an “urgent need”for increased drilling activity, particularly in Oklahoma. But toincrease the drilling activity you need more people, and thatshortage is directly related to the natural gas shortage. Sort oflike a Catch 22.

“We are seeing a large increase in drilling permits, but it isgoing to be hard to put rigs in the field,” said Bell. “Mostavailable crews are being used already, and there is a verydefinite shortage of workers for the gas/oil patch. This issomething the industry has warned about for years, particularlyduring the miserably low oil prices in 1998 and part of 1999.”

The Mid-Continent Oil & Gas chair acknowledged that naturalgas has become increasingly important in meeting the nation’senergy needs. “It has a clear environmental advantage and has beenamong the most dependable fuels. These factors account for itsincreased demand.”

But supplies won’t increase without more manpower.

Bell said that “at one time, we could look to the Gulf of Mexicoand Canada, but both no longer have excess capacity. The reason isthe decline in first-year production from new wells in these majorproducing areas. It is more than 40% and going up. That means a newwell producing 1 MMcf/d when first produced will only be producing600 Mcf/d in one year. Canadian pipelines are not being kept full,so the answer is not more pipelines.”

Most new wells today are development wells in existing fields,he said, and “we just keep putting more straws in the samereservoirs.” He also noted that wildcat wells are hitting smallerreservoirs in the producing areas, and that the federal governmentis denying access to non-producing areas where there are goodprospects of finding large reserves, such as the Eastern Gulf ofMexico and ANWAR.

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