The Colorado Oil and Gas Commission says the state will issuemore than 1,400 permits for oil and gas drilling before the end ofthis year. In Wyoming, coal bed methane production has never beenmore active. The Rockies haven’t seen this much exploration sinceLewis and Clark were here. Today, the interest is underground, ascompanies map strategies to tap energy reserves.

Overall, the Rocky Mountain region, which includes Wyoming’sprolific Powder River Basin, will see as many as 33,000 new wellsin the next decade. Colorado officials say exploration andproduction growth in the state hasn’t been this strong since theearly 1990s, when permits to drill topped the 2,000 mark.

The boom from Montana to New Mexico isn’t just in new drilling.Encouraged by reports of prolific natural gas finds in the Raton andPowder River basins, Colorado Interstate Gas announced plans inSeptember to build a $160 million natural gas pipeline to transportsupplies from Wyoming to Colorado and other states (see Daily GPI, Sept. 20).

Two other pipeline projects from the region also have beenannounced — Williams’ Western Frontier Pipeline would extend fromthe Cheyenne Hub in northeastern Colorado to Hugoton Station on itsCentral pipeline system in southwest Kansas. And Trailblazer heldan open season in early summer to expand its existing 436-milepipeline system, which runs from Colorado through southeasternWyoming to Beatrice, NE.

The Rockies have never been a secret to exploration andproduction companies. It’s just that now, with energy prices highand U.S. demand soaring, the North American assets are a hotbed ofactivity. In fact, Keith Rattie, senior vice president of TheCoastal Corp. said recently he thinks the Rockies may become asimportant as the Gulf of Mexico region in supplying the demand fornatural gas in the United States.

While the Rockies would not out-produce the Gulf, productioncould grow to between 40% and 60% in the next five years, accordingto Tom Robinson, managing director of research for Cambridge EnergyResearch Associates.

Much of the growth will be in coal bed methane production. Andthat type of drilling is also causing more environmental problems.At a Denver natural gas symposium recently, protesters warned thatdrinking wells were drying up and that land was “being torn up anddevalued.”

As methane production has grown, the Colorado Bureau of LandManagement has reported that some residents have noticed anapparent increase in the occurrence of methane in their domesticwater wells. Others also noticed the presence of gas seeps inpastures, manifested by dead vegetation.

With growing criticism, groups throughout the region have calledfor increased regulatory oversight on new drilling. In Wyoming, forexample, some coal bed methane producers expect to see delays inproduction as required water quality permits are held up in publichearings. However, many stress that the increased production hasbrought prosperity. And with the prosperity, the opportunitiesoutweigh the problems.

“Our sales tax receipts are up 25 to 35% this year,” saidGillette, WY Mayor Frank Latta. “We have almost zero unemployment.”

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