The number of drilling rigs operating in Intermountain West has increased steadily in recent decades, an indication that oil and gas companies are tapping into America’s fossil fuel resources at an increasing rate.
- Most notable is rapid drilling growth in North Dakota, where industry is attracted because of the Bakken formation, an oil rich area underlying much of western North Dakota.[i]
- The sudden drop in drilling rig totals during 2009 was a result of the Great Recession, which led to reduced oil and gas prices. Between 2008 and 2009 natural gas prices decreased from $7.97 per thousand cubic feet to $3.67 per thousand cubic feet, while crude oil prices declined from $92.57 per barrel to $59.04 per barrel.[ii] Low prices made it less profitable to develop new oil and gas supplies. Drilling has accelerated as the American economy has improved.
- Natural gas prices remain extremely low, while oil prices are at record highs. Industry is thus much more interesting in drilling new wells in oil producing areas, such as North Dakota.[iii]
[i] Rotary Rig Count