How Long Between MS Permit Issuance and Drilling in PA?
2011 Marcellus Shale drilled wells (green circles) and permits issued (red stars). For a larger, dynamic view, please click the image.
All Marcellus Shale permits issued (red circles) and drilled wells (green circles). Please zoom in for a closer look in the denser portions of the map.
Sometimes it seems like the oil and gas industry is in an awfully big hurry. They are in a hurry to get the mineral leases, presumably because if they don’t, some other operator will. They are in a hurry to get their drilling permits from the Department of Environmental Protection (DEP)–already this year, the DEP has issued 979 permits from the Marcellus Shale formation alone. And sometimes they are in a hurry to get the drill in the ground. Sometimes, however, they are not.
This does not mean that I think the 444 Marcellus Shale wells that have been spudded (time when the drill first hits the ground) so far this year is a small number. After all, today is just the 104th day of the year, which means that on average, almost 4.3 Marcellus Shale wells are started every single day. That’s a lot of industrial activity, and yet it reflects well under half of the 9.5 Marcellus Shale permits that DEP secretary Michael Krancer signs off on every day.
The longer term trends are similar: Of the 6,092 Marcellus Shale wells with active permits(1), 2,574 have been drilled. That represents about 42 percent, meaning that the 45 percent clip for 2011 is actually running a bit ahead of schedule. All of this brings a couple questions to mind:
- Why does the oil and gas industry get more than twice as many permits as they are able to drill?
- What’s the lag time for drilling once the permit is in hand?
I’m still scratching my head over the first one. I have been told that the siting and permitting processes are so involved and expensive that once the permit is in hand, the industry will drill the site, but the numbers don’t seem to reflect that as being fully true. Certainly, the 107 oil and gas drilling rigs available in Pennsylvania right now is a limiting factor in how many wells are drilled, but that doesn’t explain why the permitting process is years ahead of the drilling queue.
As for how long it takes to drill once a permit has been issued, there are means of answering that question. First, I matched the permits data to the spuds data using the wells’ unique API numbers, finding 2,804 matches for 2,574 distinct wells (2)(3). The second step was to subtract the number of days between the spud date and the permit date to determine the lag time for those permits which have been drilled, and where API numbers did match up. Let’s take a look at the results:
Number of days between permit issuance and spud (initial drilling) date.
Some of the 39 wells marked as “reworked” may not have originally been Marcellus Shale wells, so they were not included in the chart above. In addition, there were two negative values, for which it would appear that well was drilled before the permit was issued. I am assuming those are attributable to clerical error, and those wells were not included in the chart above (4).
Number of days from permit issuance to spud date for Marcellus Shale wells. Please click the “i” and then a map feature for more information. Please click the gray compass rose and double carat (^) to hide those menus.
Overall, the value ranges from -86 to 2,274 days, with an average turnaround time of just over 100 days. If we omit the outliers discussed above, the values range from 1 to 566 days, with an average of just under 99 days.
After looking at these results, I am surprised by the vast range, and beyond the number of available rigs, I can only speculate as to what factors go into determining this. It also seems remarkable that there are wells that can get the equipment in place, the site prepared, and the drill in the ground the very next day after the permit was issued. And yet, for all of that celerity, sometimes it takes well over a year to start churning dirt.
- This data comes from the DEP’s Operators With Active Wells Inventory section of their Reports page. What I called “active permits” are actually “active wells” according to the DEP. These include all wells for which the permit has been issued but have not yet been plugged. This would include wells that hav not been drilled, thus my distinction.
- Both datasets had some duplication of well numbers. All records that were exact duplicates were removed, meaning that the remainder had at least slight variances in one or more columns.
- I should mention that the number of matches to the permits list means that there are 93 mismatches between the two datasets. In theory, all of the drilled wells should be on the permit report, but for now, let’s take the 97% match rate and move forward.
- All values are included in the posted dataset, and therefore the DataTool map.
>Could it be that permits are sufficient to hold a lease?
>I'd be interested to see the 'delay' as a function of the 'date disposed'. That is, has the elapsed time been getting longer or shorter?
One hypothesis would look like this: 'First, the rate of drilling is increasing, but slowly — as operators muster more rigs and other resources; second, the rate of permitting is increasing very rapidly — as operators rush to get permits in place during a favorable political climate.'
The operators may expect that, once issued, permits will be easily renewed; but they may be concerned that the hurdle for permitting may not remain as low as it currently is.
>IMO the most urgent priority is to disallow frac water from entering watersheds and absolutely make illegal feeding frac water to sewage plants.
Spills & evaporation from frac additive mixing must be stopped. H2S from frac holding ponds & other sources must be stopped.
Only PA allows such health endangering disposal of mutagenic & carcinogenic toxins. IT IS ABJECT STUPIDITY & WORSE.