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SALT LAKE CITY (AP) – Fueled by increasing energy prices and a push for more fossil fuels, oil and natural gas exploration is on the rise in the Rocky Mountain states. And that means new jobs and new business after a long dry spell.

“The resources are there but you’re going to have to explore for it. That does create employment,” said Cody Huseby, editor of the Rocky Mountain Oil Journal. “With the increase of the drilling activity that means more rigs out there and that means you’re going to need more people and more equipment.”

New wells are springing up across the region. In Utah, where oil and gas production has long been overshadowed by coal, 460 permits for new oil or gas wells have been granted in the first six months of this year – a pace outstripping last year’s 673.

The numbers are similar in other Rocky Mountain states. In Colorado, 1,267 oil and gas drilling permits were issued through June, compared to 1,529 for all of last year.

And in Wyoming, 5,014 permits were issued in the first six months of 2001, compared to last year’s 7,423.

Much of the drilling is for natural gas (in Wyoming, 98 percent of new permits are for natural gas drilling), which saw prices spike at the beginning of the year, partly response to California’s power crisis.

Although prices have dropped in recent months as more gas has been stored, some suppliers are still betting that the country’s demand for a clean, steady supply of fuel will make drilling worth their while.

“(There is) a major change in the understanding of the future needs of the country, particularly as it relates to natural gas and the new uses of natural gas to generate power,” said Logan MacMillan, a Denver based geologist who consults for oil and gas producers. The stretch of land from Western Canada through the Rockies to New Mexico was once part of a giant seaway that is now rich in pockets of natural gas.

But it’s not always easy to get to the fuel, get it out of the ground or get it to the plant – all factors that help companies determine whether production is worthwhile. Experts say those things may be looking up.

President Bush’s drive to open up public lands to more drilling and streamline the current permitting process has producers excited. New technology makes it easier to find the resources and extract more of them at a lower cost. And the potential for new pipeline construction around the West might ease the problem of moving gas from the well to where it’s needed.

And while there are still huge question marks hanging over this traditional boom-and-bust industry, even small jumps in drilling can boost the local economy.

In Utah, the new growth translated to about 300 new oil and gas jobs from June 2000 to June 2001, according to the Department of Workforce Services. That’s with 24 active rotary wells in the state compared to an average of 16 for all of last year, according to Baker Hughes Inc.’s weekly rig count.

That fits with the industry rule of thumb, which figures each new rig brings 40 jobs.

For example, True Drilling – a Casper, Wyo.-based company that runs 10 drills for companies in Utah, Wyoming and Colorado – has 21 employees at ever rig plus at least as many outside contractors, said drilling supervisor Gary Hoggatt.

“It takes a geophysicist to come up with the play and a dirt contractor to build the road and location and someone to pump the water and someone to deliver the fuel and a mechanic to keep it running and welders to keep it running,” he said, listing the people it takes to start and run a new well.

Hoggatt said a shortage of qualified workers has kept his company from expanding in recent months. The situation is similar around the Rockies, said Lindie Woodruff, spokeswoman for the Independent Petroleum Association of Mountain States.

“I can’t tell you of a company here that isn’t hiring,” she said. “The oil and gas industry needed to step up to the increased demand that we’re seeing … People forgot that it has to come from somewhere.”

On the Net

Rocky Mountain Oil Journal: http://www.rmoj.com

Independent Petroleum Association of Mountain States: http://www.ipams.org

Copyright © 2001, Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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