Mr. Erik Milito - The House Committee on Natural Resources ...

3.3
January 2012
Increased Production Would Lead to Increased Employment
Oil and gas exploration and development is an important part of the regional economy. Freeing up federal lands for that
purpose would be a boon to the western states by paving the way for job creation. Expanding the energy productivity of
federal lands would drive increased drilling activity—which in turn would mean more jobs. <strong>The</strong>re is a clear relationship
between increased permitting and drilling activity, as seen in Figure 14.
Figure 14:
Relationship Between Permitting and Drilling Activity, 1985–2010*
*Western States (Includes Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming)
Source: BLM Oil & Gas Statistics (2010) and ICF International Rocky Mountain Forecasts (2011)
Based on this type of relationship, we can quantify the effect of the number of new permits issued on the number
of new wells started. For instance, returning to the 2007/2008 levels of new permitting would be associated with an
increase in drilling activity (Table 5). <strong>The</strong> western states stand to gain an average of 928 new wells drilled a year over the
next five years. Colorado and Utah will gain on average over 100 new wells each year, relative to their 2000-2010 average
(Table 6). New Mexico and Wyoming will also more than double that gain, averaging 236 and 378 new wells each
year, respectively.
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