Ceilidh

Michael Zey
futurist3000@aol.com

By BETSY BLANEY
.c The Associated Press

BRONCO, Texas (AP) - The surge in natural gas prices has been a boon for much of West Texas, including the Permian Basin where it's led to an increase in rigs and jobs, industry officials say.

Two years ago, the Permian Basin had 131 active drilling rigs. Today, it boasts more than 210 rigs - nearly half the statewide total of 502.

Bill Torbett is called a tool pusher, which means he oversees crews that set up and break down rigs. He has worked fairly steadily the past several years and knows that rising demand for natural gas means more good days ahead.

A constant hum whirred as Torbett gazed up at rig No. 504 and expressed his current good fortune in the boom-or-bust oil and gas industry.

``That's definitely job security,'' the 54-year-old Torbett said Friday as he stood under No. 504 near Bronco, home to 30 people along the Texas-New Mexico line. ``I hope it lasts 10 more years until I retire. Getting more rigs running keeps people working.''

The increase in rigs allowed operators to complete 680 new wells in February, the highest number in more than 30 years, according to the Texas Railroad Commission.

Each new rig creates about 100 jobs, said Morris Burns, executive vice president of the Permian Basin Petroleum Association.

``That means that there's another 10,000 jobs in the Oil Patch than there were two years ago,'' Burns said. ``We've got a lot of people developing new prospects and drilling new wells.''

The new workers owe their jobs to the rising price of natural gas, in the view of Gary Flaharty, director of investor relations for Houston-based Baker Hughes Inc., which has tracked the rig count since 1944.

``The price has been in excess of $4 for a thousand cubic feet for a long enough time that it's worth drilling,'' Flaharty said.

Natural gas prices began rising quickly in November and have remained high for several months. Analysts have expressed surprise, noting that inventories have seemed adequate, but demand has been rising.

Texas is the country's largest producer of natural gas, averaging 5.7 trillion cubic feet per year, nearly 30 percent of the nation's total. It is also the largest consumer of natural gas in the nation, at 3.9 trillion cubic feet annually. Demand has been rising with the population but mostly because of a jump in the number of gas-fired power plants.

Since 1995, 56 such plants have been built in the state - an unprecedented binge - said Charles Matthews, a member of the Texas Railroad Commission.

The same trend has taken place nationwide. As a result, the amount of natural gas burned nationwide to generate power rose 56 percent from 1993 to 2002, outstripping the growth of coal and oil in power production, according to the Energy Department.

The volatility has led to turmoil in the natural gas industry, said Cloyce Talbott, chief executive of Snyder, Texas-based drilling company Patterson-UTI Energy Inc., which owns the nation's second-largest fleet of land-based rigs.

Talbott said the country long assumed that natural gas was plentiful and cheap, leading to the building of so many gas-fired power plants that demand now outstrips supply.

``We're finding smaller pockets of natural gas, producing them at a higher rate quickly, and the decline rates are going up,'' Talbott said. The decline rate is a measurement of how quickly a gas reservoir is being drained.

``It's good for people like us, but it's not good for the people of this country,'' he said.

Alex Mills, president of the Texas Alliance of Energy Producers, disagreed. He said natural gas used to be a byproduct of oil drilling but is now a separate industry.

``The exploration effort for natural gas has really just begun,'' Mills said. ``And that's the exciting part of the natural gas business. As long as you've got a good steady demand for natural gas, people are going to look for it.''

On the Net:

Permian Basin Petroleum Association: www.permianbasin.org

Patterson-UTI: www.patenergy.com       



04/04/04 17:12 EDT
   
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