The Denver Post recently wrote a story detailing how oil drilling in northeast Colorado is up 22 percent this year. This is interesting because oil faces low prices, and Colorado just passed the nation’s strictest methane standards affecting oil and gas. The increased drilling in this area is due largely to economics. Because drilling for oil in the Wattenburg and Denver-Julesburg shale is significantly cheaper than the Bakken or Eagle-Ford (TX), companies can still get a return on investment despite low oil prices.
The uptick in drilling is also interesting because Colorado has the most strict state-based methane standards, which, with the help of groups like Western Colorado Congress and others, were set in 2014. This means that the methane standards are not impacting the bottom line of the oil companies enough to prevent them from drilling.
This flies in the face of the arguments against cutting flaring and venting in our states. Specifically, when Dakota Resource Council advocated in North Dakota to limit flaring and venting events, oil companies said that such regulation would kill the economics of the industry. This example makes it clear that the oil industry can’t always use the “sky is falling” argument when it comes to common sense regulation of oil and gas air pollution and methane.
Here is a link to the Denver Post article cited in this blog.