Grand Junction losing gas rigs to states with oil resource
Headwater Economics says the same drilling rigs that fracture for natural gas can be used for oil
A new report was released Monday saying Colorado's oil and gas industry is performing in line with regional and national trends. The research also says that while the Western Slope has a great natural gas resource, we are at a slight disadvantage because companies are moving to drill oil.
Headwater Economics says the same drilling rigs that frack for natural gas can be used for oil, so the Western Slope is losing rigs to other states like North Dakota and Texas who have a better oil resource.
Researchers say at the peak of the natural gas boom the majority of the nation's rigs were drilling natural gas. But now, the ratio has nearly reversed as oil prices are recovering stronger from the recession.
"We don't know where the rigs are going to move next. We're watching the price of oil fall a little bit," Mark Haggerty resource economist with Headwater Economy said. "There are some concerns that the price and the cost for drilling in North Dakota and even in Texas have gone up significantly in the last couple of years and that might provide some incentive for companies to invest back in natural gas."
This new study also says that a more effective tax policy could help Colorado realize it's full economic benefits. Colorado will collect $700,000 less in tax revenue than Wyoming on new wells being drilled.
The research suggests more people are drilling in general so Colorado is missing out on funds.
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