U.S. drilling permits approach record levels

A survey by the Interstate Oil and Gas Compact Commission has indicated that regulators in several states are handling record number of applications to drill for natural gas and oil. Year-to-date, 19 of the 24 states surveyed showed the numbers of permits significantly up compared with the same time period last year; overall, the total number of permits issued has increased by 4.7 percent.

Colorado and Wyoming showed particularly strong increases, with 3,700 and 4,053 well permit applications this year. Nebraska, Nevada and South Dakota showed large percentage increases but started from very low bases. Alaska showed an increase of 8 percent, going from 52 permit applications last year to 57 permit applications this year. The published data do not indicate how many of the applications were for natural gas wells, although most new permits across the United States were for gas wells, according to an IOGCC new release.

The news release pointed out that state oil and gas regulatory agencies are generally responsible for issuing drilling permits and ensuring regulatory compliance — the IOGCC champions development of U.S. oil and natural gas for its 37 member states.

“State programs are very efficient,” Christine Hansen, IOGCC executive director said. “They are designed to meet local needs, so they are far more flexible than a one-size-fits-all regulatory structure.”

Hansen said that states are doing an excellent job of keeping up with the growing demands of a high level of oil and gas exploration and development activity — state regulatory programs cover all aspects of oil and gas development. She noted that some legislatures have provided additional funding to support the expanding workload.

“States have many decades’ experience in regulating the petroleum exploration and production industry,” Hansen said. “Our regulatory structure is the world leader in protecting the environment while ensuring the resources can be fully produced. The public can be assured that states are well equipped to carry on during these very busy times.”

The IOGCC also said that state revenue and taxing agencies are gearing up for increased oil and gas production, “with many states collecting wellhead taxes nearly double the rate of 2003.”

“Our member states rely on this important source of revenue through direct taxes, and also rely on the economic development that results,” Hansen said.

—Alan Bailey