County exploration, extraction down significantly
New natural gas exploration and extraction has slowed to a relative crawl over the last year, as the number of Applications for Permits to Drill (APDs) has plummeted. According to U.S. Bureau of Land Management records, the number of federal APDs approved on BLM land in Carbon County has decreased from 82 issued in 2008 to around three, thus far, for 2009.
However, APDs do not represent the only decrease, as the number of wells drilled has also declined. In 2007, 81 natural gas wells were drilled on private or state lands in the county. In 2008, 109 wells were drilled. Thus far, for 2009, 11 wells have been drilled, according to the Utah Division of Oil, and Mining.
Officials attribute a variety of causes for the decrease, including the bad economy.
"I can't say for sure, (but in the past) prices have had a trend of peaking and coming down; it isn't like at one time, when it was 20 cents per 1,000 cubic feet or one MCF (current average is about $3.41, according to the Opal Hub, for Nov. 2009), but they're still not what they were," said Jerry Kenczka, acting field office manager at the Price BLM office.
According to Kenczka, natural gas prices typically fluctuate with the price of oil, which has also declined significantly over the past couple of years.
Natural gas is less than half its going price in 2007, when it was $7 to $9 per MCF. Although demand hasn't changed much, the economy has. Another issue that Kenczka mentioned as a possible cause for decline in the number of wells approved is a state air quality study that the BLM is in the process of resolving.
"Right now, we're waiting on the results to be published for the Uintah Basin. I think they're getting close to doing that, but, in terms of APDs (even when they are approved), it's up to the company whether or not they drill," said Kenczka.
The number of active rigs has also declined in the state. In Carbon County, which has been the second largest producer of natural gas in Utah for the last few years, the amount of gas produced has decreased. In 2008, Carbon County produced 94,546,746 MCFs. In 2009, so far, 65,941,070 MCFs have been produced, with 44 active wells. Uintah County leads the state, with 191,668,911 MCFs produced in 2009, according the Utah Division of Oil, Gas and Mining. In 2008 the United States imported about 12.83 percent of its total natural gas according to the U.S, Department of Energy.
One area that can affect production is infrastructure, because moving the gas is important.
In Carbon County, Questar has the only pipeline, on BLM land at least, that goes out of the county. Currently, Kenczka had no knowledge of any expansion plans for pipelines. If prices were ever to rise, this could change.