 This is the second in a continuing series of communications from the Montana Petroleum Association intended to provide information of interest to Montanans.
-- Dave Galt, Executive Director www.montanapetroleum.org
Energy Innovations Help Montana
New limits on “fraccing” would cost jobs, revenue
One reason Montana has fared better during this recession than other states is the combination of plentiful oil and gas resources and a state industry that has made the investment in the advanced technologies needed to unlock new sources of energy for America. However, a proposal from Washington, D.C. threatens to choke off much of Montana’s energy development activities and slow our economy to a crawl.
Hydraulic fracturing (sometimes called “fraccing”) uses water under high-pressure to create cracks and sand to hold open fractures in very hard rock formations. The result: tiny openings that allow oil and gas to flow to the wellbore where it can be brought to the surface. Fraccing is a safe, proven technique with a track record of more than 60 years of success, allowing companies to tap vital energy resources for use right here at home.
Well completion techniques like hydraulic fracturing enhance the productivity of 90 percent of America’s oil and gas wells and have made Montana’s wells productive. According to the Montana Board of Oil & Gas Conservation, half of Montana’s 4,199 wells rely upon the technology. Without it, up to 30 percent of current domestic supply would remain inaccessible.
Currently, hydraulic fracturing is regulated by the states where energy development takes place. For six decades, more than 1 million wells have been hydraulically fractured across the U.S. with no harm to groundwater or to the environment.
Tom Richmond, division administrator of the Montana Board of Oil and Gas Conservation, Montana Department of Natural Resources and Conservation, warns that if hydraulic fracturing is restricted, “many of Montana's gas wells and essentially all our Bakken oil wells would not be economically viable to drill … resulting in a loss of at least $4 billion worth of oil and $350 million of state revenues.”
Oil production in Montana
More production means more benefits to Montanans
The energy industry is important to over 12,000 Montanans whose jobs are supported by the oil and gas industry. Production and refining revenues help educate thousands of Montana children who attend our public schools. The state of Montana realizes nearly $53 million per year in oil and gas royalties which help provide vital services.
Adding another layer of unneeded regulations for a proven safe technology would likely cripple energy development and greatly reduce production in Montana. It’s estimated that within a short period, the number of productive wells in Montana would be cut in half, dealing a severe blow to state income and creating a ripple effect in communities across Montana.
The oil and gas industry takes a careful, responsible approach to energy development, balancing the imperative to meet America’s energy needs with a firm commitment to protect the environment.
Hydraulic fracturing technology is critical to future energy production
If Washington prohibits Montana producers from using this technology to extract oil and gas, Montana’s production will be cut in half. At least half of the state’s oil wells would have to be shut down, with a significant reduction in the severance taxes and royalties they generate in Montana.
Hydraulic fracturing takes place thousands of feet below the water table, and does not impact groundwater.
The Montana Petroleum Association, Inc. is a voluntary, non-profit trade association, serving a membership of oil and natural gas producers, gathering and pipeline companies, petroleum refiners, service providers and consultants.
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