Demand boosts Colorado output

The Associated Press

Soaring national demand for gas and oil is producing what could become the biggest energy boom in Colorado history, with drilling permits for wells in this state expected to hit an all-time high of 2,500 this year. Experts say even that is not enough to meet the nation’s needs because production in the Gulf of Mexico is rapidly dwindling, and the nation is increasingly using natural gas to fuel generation of electricity. The Energy Information Administration forecasts that the United States will need between 29 percent and 51 percent more natural gas by 2025. Meanwhile, U.S. production has flat-lined despite ambitious exploration and innovative extraction technologies. These shifts in supply and demand caused the National Petroleum Council recently to predict that prices will be high and volatile.

In 2004, for the first time ever, Colorado production is projected to reach a trillion cubic feet of gas. Wellhead revenues should be about $4 billion, according to Ken Wonstolen, general counsel for the Colorado Oil and Gas Association.

Activity this year will surpass the record 2,378 permits issued in Colorado in 1981, state regulators say. And they expect operators to sustain this pace for several years to come.

“Because of this country’s insatiable thirst for energy, we are on a knife’s edge in terms of being able to supply it,” said Walter Lowry, national spokesman for Canada-based EnCana Corp., one of the world’s largest independent energy companies and one hard at work in Colorado. More than two-thirds of new homes in America use natural gas for heating, and an increasing number of homeowners will be using it to run their air conditioners, too, according to the Aspen-based Community Office for Resource Efficiency.