Link here (regional links break early).
According to Lynn Helms, director of the Department of Mineral Resources, the number of new drilling rigs in the Williston Basin is projected to reach an unprecedented 225 by the end of the year.
“There are at least 1,000 undrilled permits,” says Helms, “and 250 permits in the queue waiting to be approved.”
Helms states that an oil company leases a tract of land for three years, and then applies for a drilling permit. However, the drilling permit is only good for one year. After that, the oil company has to re-apply, go to the bottom of the queue and risk losing its leasehold.
Datapoints:
- Despite the previous winter being one of the worse on record, ND is still on pace to bring in more drilling rigs than ever before
- North Dakota is projected to crush the state’s crude production record
- North Dakota produced 64.6 million barrels of crude from the beginning of this year to June; by the end of the year, it is estimated the state will produce 133 million barrels
- Currently: 1,000 undrilled permits
Pace of activity:
“Current permit activity suggests that companies intend to drill 5,000 wells over the next 2½ years,” states Helms. According to Helms, in the last five years, 2,600 wells have been drilled. This will be nearly twice the number of wells drilled in half the amount of time.
Interesting metric would be time between application and approval.
ReplyDeleteWould seem obvious that with increased permit applications this time would increase unless staff is added. Another good metric would be time to actually process a permit ap in other words backing out the time that the permits spends "in queue" just waiting to start the approval process. I assume ndic needs budget authority (legislature and gov) to add staff for the purpose of reducing permit processing time.
A month or so ago I would have asked the same thing (perhaps), but if you visit/work/live in the oil patch in western North Dakota you would see how incredibly busy folks are. Maybe you do visit/work/live in one of the nine oil counties and have experienced those delays, but my thought is just the opposite. This thing -- the Bakken -- has literally exploded, and I have to take my hat off to the residents of North Dakota -- particularly the farmers and those over 35 years of age for managing as well as they do. It truly is incredible how fast things are moving, and I doubt the queue at NDIC for permits is a significant choke point. The oil companies will have their hands full just drilling what they already have.
ReplyDeleteI might have responded differently, as I said above, but after being here now in the Bakken for the second time in two months, I find it incredible how fast it is moving. The good weather and long days has made a huge difference.
I am willing to accept as a given that all involved are giving their best and even going above and beyond the basic requirements. To me, the applicants are the "customer" in this scenario and they decide what the acceptable processing times are. If operators are happy, then, I'm happy :). I'm a big believer in customer satisfaction driven processes even in govt work.
ReplyDeleteIt's interesting you say that. It seems that folks in general are extremely courteous still here in Williston despite the huge change.
ReplyDeletePeople seem to accept that it is going to take longer to get some things done.
I've been quite impressed with how patient a lot of folks have been.
A random thought flashed across my mind as I wrote that (long term residents of North Dakota will understand): I am so happy that North Dakota experiences very, very harsh winters.
Growing up in ND there use to be a saying, "The long cold winters keep the riff raff out."
ReplyDeleteYou read my mind. Smile.
ReplyDelete