Western Values Project aims to provide members of the media, policy makers and the public with an honest, accurate and rhetoric-free source of information about energy development on public lands.Oil and Gas Drilling Activity on All Land Types in Montana Source: Baker Hughes Oil and gas exploration has reached a standstill in Montana. Not a single well has been […] Read More
Source: Baker Hughes
Oil and gas exploration has reached a standstill in Montana. Not a single well has been drilled in the state since November 2015, when oil and gas prices fell below $40/BBL and $2/MMBtu, respectively.
Well permitting has also reached historic lows in Montana. The Montana Board of Oil and Gas, which issues permits for drilling on state, private and federal lands, issued fewer drilling permits last year than any year over the past decade.
Even though drilling and permitting declined in Montana last year, federal oil and gas production still increased from FY 2014 levels, as operators pumped more from existing wells to survive the market downturn.1
Source: BLM Oil and Gas Statistics
As another likely response to the price climate, interest in new leasing also reached historic lows in Montana last year, as industry nominated less than 15,000 acres of federal land for lease. To compare, the previous year, in FY 2014, industry nominated more than 300,000 acres, and, in FY 2007, nominations topped 1 million acres (when gas averaged $7/MMBtu).
For the second consecutive year, less than 100,000 acres of state and federal land were leased in Montana last year.
Less than half of federal leases in Montana were actively producing oil or gas at the end of FY 2015, and more than 20% of all leases were “suspended.” As The Wilderness Society recently disclosed, industry has widely-abused the federal lease suspension program, particularly during times of economic downturn, to extend federal leases beyond their normal primary terms without satisfying normal drilling and development obligations, while also avoiding rental and royalty payments.