Colo. having busy drilling permit year

Colorado is poised to have its second busiest year for issuing oil and gas drilling permits despite stricter regulations that took effect last year, a state regulator said.

Colorado Oil and Gas Conservation Commission Director David Neslin said the state has issued more than 3,100 permits through the first six months of the year and is on pace to issue more than 6,500 by the end of the year. That would be a 30 percent increase from last year.

“This would make 2010 the second busiest year for permitting in the state’s history despite the twin impediments of low natural gas prices and decreased economic activity,” Neslin said in a memo this week. He said Colorado is among the leaders nationwide in permits issued and has the most in the Rocky Mountain region. Wyoming is the second busiest in the region with more than 2,700 permits so far, Neslin.

“Colorado’s oil and gas industry is currently faring better than that in many other states, including our closest neighbors,” Neslin said.

Industry officials have warned that the rules that took effect last year would hinder energy development and discourage investment in Colorado. The state had its record year in 2008, when officials issued 8,027 permits. Last year there was a decline, but Colorado still had the most permits in the region with 5,159.

Neslin said in his memo that Garfield County led the state in permits through June, with 1,089. Weld County was second with 1,010.

Permits don’t necessarily translate to drilling activity because companies don’t use every permit issued. However, Neslin said figures from Anderson Reports, an industry tracking firm, showed that 819 new wells were created in Colorado through June 15, the most in the region. Wyoming had the second most new wells with 506.

“We believe this demonstrates that operators have adjusted to the amended regulations and are continuing to pursue their opportunities here,” Neslin said.

- Associated Press