A recent survey by the Interstate Oil and Gas Compact Commission (IOGCC) indicates state regulators are handling record numbers of applications to drill for natural gas and oil. Of 24 states surveyed, 19 showed that well permits were up from the same period a year ago. The combined permit total is up 4.7% from the year-to-date total from 2004. Nationally, permits in surveyed states totaled 23,093 year to date, easily surpassing the 22,024 issued during the same period last year. Most permits are for gas wells. Domestic producers supply 85% of the gas consumed in the U.S., with most of the remaining demand met by imports from Canada. The IOGCC numbers are supported by the findings of IHS Energy, which show onshore drilling permits in April were up more than 31% versus April 2004. In most cases, state oil and gas regulatory agencies are responsible for issuing drilling permits. "State programs are very efficient," says Christine Hansen, IOGCC executive director. "They are designed to meet local needs, so they are far more flexible than a one-size-fits-all [federal] regulatory structure." In addition to drilling permits, states require various filings for oilfield work throughout the life of a well. Regulations cover everything from initial permission to conduct a seismic evaluation to the final plugging of a well and dozens of activities in between. State inspectors also monitor compliance with regulations in the field, Hansen says. Some legislatures have increased funding for their regulatory agency in recognition of the increased workload. State revenue and taxing agencies have also geared up for the increased production with many states collecting wellhead taxes nearly double the rate of 2003. "Our member states rely on this important source of revenue through direct taxes, and also rely on the economic development that results," Hansen says. The IOGCC is a 37-state government organization that champions the wise development of U.S. oil and natural gas.
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