Colorado poised to pass California for oil production

Article By: Colorado Politics

Oil production is booming in Colorado — so much so that the state is about to overtake California in the crude-oil output rankings, federal figures show.

Crude oil output in Colorado reached 451,000 barrels a day in April, according to data from the U.S. Energy Information Administration. That’s slightly less than in California, a traditional oil and gas powerhouse where production has been dropping gradually in recent years.

And by August, oil production in Colorado could hit a record level of 611,000 barrels a day, EIA projects.

One reason for the jump in production is that Colorado has a better network of pipelines to carry crude oil elsewhere than some other oil-producing states.

“You’re seeing really good growth in Colorado production,” with oil companies now rushing to finish wells they previously drilled but weren’t operating, Andy Lipow, president of Lipow Oil Associates LLC in Houston, tells Bloomberg.

The Niobrara shale formation in northeast Colorado and neighboring states has been the focus of Colorado’s oil boom.

As recently as 2016, California ranked third among the states for crude-oil production (behind Texas, by far the biggest, and North Dakota). That year, Colorado ranked seventh.

The rise in production comes amid a debate in the state over how close to homes oil and gas operations should be allowed to get, and whether local governments should have a bigger role in regulating energy production.

Under one proposed ballot measure calling for a 2,500-foot setback for new wells from homes and schools, about 85 percent of the state and private land in Colorado would be unavailable for surface development by the oil and gas industry, according to an analysis by the Colorado Oil and Gas Conservation Commission.

Democratic gubernatorial candidate Jared Polis has been an advocate of tighter regulation of oil and gas production in Colorado.