Oil and gas activity continued to grow in Carlsbad throughout 2018 as operators moved in and drilled throughout southeast New Mexico.
The Bureau of Land Management’s Carlsbad Field Office soon reported some of the highest numbers across the country.
Applications to permit drilling (APDs) nearly doubled from 2017’s total of 813 to 1,533 by fall of this year, per records from the BLM.
That accounted for about a third of all the APDs in Carlsbad, and with about 100 drilling rigs in the region, BLM spokesman Derrick Henry at the national office said the Carlsbad office in the BLM’s Pecos District is seeing more activity than any other part of the country.
He said not only does the Carlsbad Field Process more applications than any other, it currently processes more APDs than the past two years combined.
That growth, Henry said, is driven by changing technologies and stable prices per barrel.
“The Carlsbad Field Office has surged in recent years, as the Permian is a hot play in New Mexico and Texas,” he said. “There is also significant leasing sales activity in the area, one of the hottest plays in the country.”
The Pecos District held the BLM’s three largest lease sales in the last three years, but this year’s September sale was the biggest in BLM’s history, generating about $972 million.
In 2016, its highest sale generated $145 million, and 2017 saw a sale for $130 million.
But Carlsbad’s isn’t the only oil play supporting U.S. domestic production.
Henry said BLM’s also sees high permitting numbers in North Dakota, Wyoming and Colorado.
From the BLM’s Wyoming office in the southern part of the state, APDs statewide do rival the Carlsbad Field Office.
There were about 1,227 APDs in fiscal year 2018 in Wyoming, down slightly from 2017’s total of 1,295, but an increase from 2016’s total of 713 APDs.
Most of the activity is centered in BLM Wyoming’s Casper, Pinedale and Buffalo offices, respectively located in the east, west and northeast parts of the state.
Public Affairs Specialist Courtney Whiteman said the state office leased about 750,000 acres for oil and gas development this year, raising about $119 million in revenue.
Last year, the office leased only 340,000 acres, but made $180 million.
“Our oil and gas program is a reflection of industry applications and expressions of interest,” Whiteman said.
She said the office doesn’t only focus on extracting oil and gas, but other minerals such as coal, uranium and bentonite.
And it also has an extensive tourism and recreation program, which brought about 3 million visitors to Wyoming public lands last year.
Whiteman said BLM Wyoming is committed to a “multi-use” philosophy when it comes to managing public lands, including grazing, forestry and rights of way.
“We’re focused on striking the right balance of development and conservation, ensuring the sustainability of our public lands now and tomorrow, serving the American public, and cultivating good relationships through partnership, trust and communication,” she said.
The BLM’s North Dakota Field Office received about 800 APDs during 2014, then saw a dip down to about 500 the next year.
This year, North Dakota is booming again, returning to about 800 APDs for 2018.
Field Manager Loren Wickstrom said the activity is tied directly to the price per barrel.
“When the prices of oil fell, we dropped down, but we never really busted,” he said. “The trend really was tied to the price per barrel.”
Wickstrom said oil is “absolutely” his office’s biggest function, as it manages 4.8 million subsurface acres, but only 59,948 surface acres.
There were about 200 rigs in the region in 2014, records show, but today there are just 50.
With technological innovations such as lateral drilling and hydraulic fracturing, Wickstrom it now takes only 10 days to drill a rig, while it used to take 30.
Most of the play is an underground shale known as the Bakken Pool in western North Dakota and eastern Montana, contained within the Williston Basin.
“In comparison to Carlsbad, I don’t have a lot of BLM surface, but I have a lot of subsurface,” Wickstrom said.
He said the office does manage some coal extraction, along with recreational and grazing uses, but oil is the main objective.
“There’s a lot of specialties I don’t have because I have so little surface area,” Wickstrom said. “There’s just not enough work.”
Some of the other challenges are staffing the office, as its located in a remote area in Dickinson, North Dakota on the western side of the state.
The local housing market also struggled during the last boom, he said, as workers moved in and demand grew.
Housing does appear to have stabilized, Wickstrom said.
“The challenges I have up here are keeping a qualified workforce,” he said. “The winters up here are harsh. People will come up here, and at some point, they learn their craft and find another opportunity.”
In the future, Wickstrom said his state hopes to produce 2 million barrels per day, a goal set in September by North Dakota Gov. Doug Burgum.
Currently, the state is at about 1.3 million barrels per day.
“That’s the governor’s goal,” Wickstrom said. “That’s a lot of APDs.”
BLM’s Colorado Office saw a slight decline in APDs from last year’s total of 400 to about 368 in fiscal year 2018.
Most of that activity is in the Canyon City and Colorado River regions.
Spokesperson Kirby Shedlowski said the office does typically see significant oil and gas activity from year to year, but also continues to emphasize other uses such as recreation, timber and renewable energy.
In fiscal year 2017, BLM Colorado created $6.7 billion in total economic output, records show, sustaining about 35,000 jobs.
The Colorado Office returns about $180 for every dollar invested in its recreation program, records show, the highest of any BLM state office.
Shedlowski said recreation is growing at the highest rate.
“For Colorado, it’s the multi-use,” she said. “It’s a great example of BLM’s multi-use mission.”
Adrian Hedden can be reached at 575-628-5516, firstname.lastname@example.org or @AdrianHedden on Twitter.
©2018 the Carlsbad Current-Argus (Carlsbad, N.M.)
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