Free Republic

McCrory said he continues to promote his “all of the above” approach to energy, endorsing such options as shale gas exploration in the state's midsection as well as offshore wind farms. But he also said the time is approaching for a hard look at the costs of subsidizing renewable energy resources such as solar and wind, with the ultimate goal of phasing out those subsidies.

Totally agree!

ncana plans to operate two to four drilling rigs in the area in 2014, according to a company presentation. The wells cost $4 million to $5 million each and have shown initial production rates of 400 to 500 barrels per day.

The San Juan historically has been one of the nation’s most productive natural-gas basins, but with prices low for that commodity and high for oil, drillers are finding oil in some previously overlooked areas.

Improved techniques for horizontal drilling and hydraulic fracturing, or “fracking,” have made such drilling possible.

Encana’s activities have been a boon to some Farmington-area companies. Encana forged deals with local production companies, most notably Dugan Production Corp., that held decades-old leases in the area. Aztec Well Servicing Co. has benefited as Encana’s drilling contractor.

Other companies, including WPX Energy and Bill Barrett Corp., have dipped a toe in the emerging oil play, but Encana has been by far the most aggressive.

The booming oil activity south of the border stands in contrast to slowly proceeding development in the Colorado portion of the San Juan Basin.

The geology of the basin is thought to be more oily in the south, while the northern end of the basin in Colorado leans more heavily toward natural gas. At current prices, oil is far more valuable than natural gas, and drilling activity appears to be following the more oily geology.

La Plata County has approved only 37 applications to drill this year, on pace to fall well short of 2012’s total of 71. The vast majority were for conventional coal-bed methane wells.

A few wells in La Plata County are searching for oil. Swift Energy Co. permitted two wells in the spring. The first well, south of Hesperus, is exploring for oil in the Niobrara formation. The second permit is for a nearby well that has not yet been drilled.

Swift has leased more than 70,000 acres in the area.

Huntington Energy has permitted three wells in La Plata County targeting the Mancos formation. The Oklahoma City-based company did not return a call seeking comment.

For the moment, the oil boom remains confined to New Mexico’s portion of the basin. La Plata County oil production fell 4.6 percent in 2012 to 34,412 barrels.

With the Huntington and Swift explorations still in early phases, La Plata County still could see more oil production.

The country’s newfound oil and gas boom, made possible by modern drilling technologies, has helped keep gasoline prices well below the $4-per-gallon peaks that consumers faced just a few years ago. It’s also driven home-heating bills to record lows since 2009.

Now, with production still climbing fast, Fine and others say natural-gas prices will remain moderately low for another five to 10 years at least. And gasoline prices likely will continue to fall into 2014, before stabilizing at somewhere above $2 per gallon for the foreseeable future.

“I believe gasoline will reach $2.35 a gallon or less quite soon, within a year at most,” Fine said.