December 15, 2014

As Oil Dips, What To Watch For In Colorado And Other Boom States

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December 15, 2014 | KUNC | Stephanie Paige Ogburn

Reporter Stephanie Ogburn, at Inside Energy partner station KUNC, has published a useful guide for monitoring the impacts of the oil price slide on local economies and local industry. Watch for three things, she reports:

  • Rig counts: A slowdown in drilling means companies hire fewer rigs to drill new wells. This is already being seen in North Dakota where the rig count is 10 fewer than what it was in September.
  • Drilling permit applications, also known as Applications for Permits to Drill, or APD. No slowdown in APDs is apparent now, even in boom states, because there is a time lag before the lower prices hit the market, and because much of North American oil is still profitable even as prices fall.
  • Falling tax revenues: States that rely on oil and has severance taxes will definitely see an impact on state coffers. States base their budgets on oil price projections, and the recent price slide will hurt states like Wyoming and North Dakota, whose economies are dependent on fossil fuel extraction. Inside Energy looked at this impact in the first weeks of the oil price slide.