Industry decries regs as drilling nears all-time high

Whether it’s coal, uranium, oil or natural gas, Wyoming’s industry and political leaders proclaim that onerous regulations are dogging domestic energy development. Yet evidence continues to emerge suggesting otherwise.

This morning, Headwaters Economics released its statistical analysis, “Drilling Rig Activity Nears All-Time High,” demonstrating that oil and natural gas drilling in the United States has returned to pre-recession levels.

By late May 2011, there were 1,847 active rigs in the U.S., or 91 percent of the 2008 natural gas surge (2,031 rigs). That’s a major recovery from June 2009 when there were 875 active rigs nationwide.

“Oil and natural gas drilling activity has made a strong recovery since reaching a recession-induced low in late 2008,” said Julia Haggerty, the report’s author. “Market prices and advancements in drilling technology account for most of the increases in drilling activity.”

To be fair, the permitting process does take longer than it did 10-20 years ago. But companies have adjusted by planning for more lead-time, both in the coal and the natural gas industries. That’s more difficult for small Mom & Pop outfits to pull off. But that’s not the complaint. Instead, many of Wyoming’s leaders are claiming war against a regulatory regime bent on “job-killing” red-tape.

Responding to the EPA’s court-mandated move to address coal-fired power plant emissions, and an administrative move to extend a ban on uranium mining near the Grand Canyon, Rep. Cynthia Lummis (R-Wyoming) issued a press release today stating, “The Obama war on western jobs continues. With its vast natural resources, the western United States could be a driver for economic recovery if only the Obama Administration would lay down its arms.”

Matthew Garrington of the Checks & Balances Project said the disconnect between actual drilling and production figures and claims that the West is under siege by bureaucrats gone wild is simple politics. High energy prices, said Garrington, are held up as evidence of too much regulation when evidence shows actual production remains tied to market fundamentals.

“We have more active rigs in the U.S. than all the countries combined,” Garrington told WyoFile. “For the last four of the past five months, the U.S. has been a net-exporter of petroleum. … If we do more drilling there’s no guarantee those resources will stay in the U.S.”

A handful of Wyoming lawmakers are spending taxpayer funds to form a “Production States” group — a sort of OPEC of western states who want to use their might in energy resource production to have more say in matters of federal environmental regulation.

So what’s really going on here? Is the West’s coal, oil, natural gas and uranium mining industries really under attack? Or is the war really one of political rhetoric? In January, U.S. Sen. Mike Enzi (R-Wyoming) told WyoFile, “This (Obama) administration is flat-out against coal and they’re not going to let another permit go through. In 10 years, the coal industry will be done.”

A month later, Interior Secretary Ken Salazar came to Cheyenne to announce the Bureau of Land Management would hold competitive lease sales this year for four federal coal tracts in the Powder River Basin, totaling 758 million tons. Many more lease sales will follow, he assured.

No matter the political stripe, people on both sides of the partisan divide agree there’s plenty of hyperbole that comes from politicians, so there’s at least an opportunity to agree on actual production and market forces at play. Check back on Thursday when I write in the WyoFile Energy Report about this topic in more depth.

NOTE: This blog was updated on June 21 to clarify 2008 drilling surge and uranium mining ban.

— Contact Dustin Bleizeffer at 307-577-6069 or dustin@wyofile.com.

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Published on June 20, 2011

  • http://www.panama-offshore-services.com/ Panama foundation

    US Gulf of Mexico Sees ResurgenceThe number of offshore rigs actively drilling in the US Gulf of Mexico increased by two this week to a total of 35 active rigs more than doubling the number of rigs drilling at this time last year. As the effects of the drilling moratorium dissipate and more deepwater and shallow-water drilling permits are issued operators are diving back into exploration and development in the Gulf.Louisiana waters host 33 of the offshore rigs and the other two are working offshore Texas.

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