Energy analysts say commodity prices have more bearing on production in the state than Senate Bill 181
The more than two dozen drilling rigs operating today in Colorado’s oil and gas fields won’t be going silent any time soon, even with the enactment this year of a law that promises to make life tougher for the industry statewide.
For starters, most operators in Colorado already have hundreds of completed permits in the bag that will keep them busy for months to come regardless of what happens to the pace of future approvals to drill. A report from Moody’s Investor Service issued right after Senate Bill 181 was signed into law in April gave a relatively sanguine forecast for oil and gas production in the state.
The firm concluded that the new law — which grants local governments more control over energy extraction and places emphasis on health and safety in oil and gas operations — would be blunted by the fact that “most of the producers have permitted activity in hand that would allow them to operate normally for the next six months to two years.”
Then there’s the overriding reality, energy experts say, that the global price of minerals has exerted and will continue to exert a far greater influence on production levels in the state than will SB 181.
“Lots of geopolitical momentum is affecting a lot of these producers,” said Matt Hagerty, an analyst with Lakewood-based BTU Analytics.