14
and economic activity.
6
According to the IOGCC, about 69.1 percent and 75.9 percent of
the nation’s operating oil and gas wells, respectively, are marginal (IOGCC 2015 at 22).
The IOGCC defines a marginal well as “a well that produces 10 barrels of oil or 60 Mcf
of natural gas per day or less” (IOGCC 2015 at 2).
7
The U.S. Energy Information
Administration (EIA) reported that, in 2016, roughly 76.4 percent of oil wells produced
less than or equal to 10 barrels of oil equivalent (BOE) per day and 81.3 percent of oil
wells produced less than or equal to 15 BOE/day. For gas wells, EIA reported that
roughly 71.6 percent produced less than or equal to 10 BOE/day and 78.2 percent less
than or equal to 15 BOE/day. For both oil and gas wells, EIA estimates that 73.3 percent
of all wells produce less than 10 BOE/day.
8
Applying these estimates to the overall
number of BLM-administered wells indicates that about 69,000 wells producing Federal
and/or Indian oil and gas are marginal.
9
6
IOGCC, “Marginal Wells: Fuel for Economic Growth. 2015 Report.” Available on the web at
http://iogcc.ok.gov/Websites/iogcc/images/MarginalWell/MarginalWell-2015.pdf.
7
By other definitions, marginal or stripper wells might include those with production of up to 15 barrels of
oil or 90 Mcf of natural gas per day or less. The U.S. Energy Information Administration (EIA) reported
that, in 2009, roughly 78.7 percent of oil wells produced less than or equal to 10 barrels of oil equivalent
(BOE) per day and 85.4 percent of oil wells produced less than or equal to 15 BOE/day. For gas wells,
EIA reported that roughly 64.5 percent produced less than or equal to 10 BOE/day and 73.3 percent less
than or equal to 15 BOE/day. EIA, “United States Total 2009: Distribution of Wells by Production Rate
Bracket.” December 2010. Available on the web at
https://www.eia.gov/naturalgas/archive/petrosystem/us_table.html.
8
EIA, “The Distribution of U.S. Oil and Natural Gas Wells by Production Rate.” December
2017. Available on the web at https://www.eia.gov/petroleum/wells/, Table B17. United States oil and gas
well summary statistics, 2016.
9
The BLM obtained this number by estimating the percent of marginal wells and by multiplying that
percentage by the number of Federal and Indian wells reported in the BLM Oil and Gas Statistics, available
at https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/oil-and-gas-statistics
. The BLM is not
aware of any information indicating that the incidence of marginal wells producing Federal and Indian oil
and gas is substantially different than the incidence of marginal wells nationally, and so it is appropriate to
use the EIA’s estimate of the national incidence of marginal wells in estimating the number of marginal
wells producing Federal and Indian oil and gas. The BLM’s estimate is further supported by comments that
the American Petroleum Institute (API) submitted to the BLM’s proposed rule. The API estimates that
between 70 percent and 80 percent of the Federal and Indian wells that would have been impacted by the
2016 rule are marginal. See API comment at Appendix A, p. 3.