Utah energy business grows, revenues soar

Utah's energy boom just got bigger as the number of oil and natural gas well permits issued in the first half of this year climbed to 1,100 permits — a 51 percent increase over the 728 permits handed out in the same six-month period in 2005.

The number of permits issued this year is expected to set a new record, according to Utah Division of Oil, Gas and Mining, which approves the permits.

"We'll be well past the 1,800 mark," said Jim Springer, a spokesman for the division. "We could hit 2,000."

Last year, the division issued 1,629 permits.

And more drilling permits means more money into Utah's general fund.

In fact, net revenue for the fund from oil and natural gas production reached a record $77.4 million in the 2006 fiscal year ended June 30, up 44.6 percent from $53.5 million the prior fiscal year, according to Charlie Roberts, a spokesman for the Utah State Tax Commission.

Drilling activity has intensified as oil prices have skyrocketed. On Friday, crude oil for September delivery fell 71 cents, or 0.9 percent, to close at $74.75 a barrel in floor trading on the New York Mercantile Exchange. But prices, which gained 2 percent this week, are up 22 percent from a year ago, according to a Bloomberg News story.

Companies requesting permits usually can receive them within 30 to 45 days, even with the recent ramp-up in activity. They then have one year to begin drilling after securing a permit, but they can be granted an additional year extension.

Springer said the division recently hired a couple of new people to keep up with the demand.

"It's definitely put a heavy workload on them," Springer said. "They have to work pretty feverishly to keep up."

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