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Petroleum

National Petroleum Council Begins Study on Domestic Marginal Oil and Gas Wells

Strategic Insights

— 1 min read

The National Petroleum Council, a private-sector advisory group to the Secretary of Energy, has initiated a study on the role of domestic marginal oil and gas wells and the impact of government incentives for maintaining production from them. The study, requested by Secretary Hazel O'Leary, aims to determine the significance of existing marginal wells, analyze their future growth trend, and evaluate the effectiveness of incentives to preserve them. The study will utilize a definition of marginal oil and gas wells proposed by Senator David L. Boren (D-Okla.), which includes wells that produce up to 15 b/d, wells that produce 16-25 b/d at greater than 95% water production, and any well producing oil with less than 20 degrees gravity.

Key Takeaways:

  • The study will focus on developing a definition of marginal oil and gas wells using physical and/or economic characteristics.
  • The subcommittee agreed to evaluate the significance of existing marginal wells, analyze their future growth trend, and evaluate and set priorities for incentives to preserve them.
  • The study will use Senator David L. Boren's (D-Okla.) definition of a stripper well, which includes wells that produce up to 15 b/d and other criteria.
  • The study's objectives are to determine the costs of stripper-well relief before making any decisions on relief proposals.
  • The NPC subcommittee met to set goals for the study and agreed to include Senator Boren's definition as a guide in its efforts.
  • The study is due in June and will be conducted by an NPC committee.

Statistics:

  • The study aims to analyze the future growth trend of marginal production.
  • The definition of marginal oil and gas wells proposed by Senator David L. Boren (D-Okla.) includes wells that produce up to 15 b/d.
  • 16-25 b/d is the standard for wells with greater than 95% water production according to Senator Boren's definition.
  • Wells producing oil with less than 20 degrees gravity are also included in the definition.

Sources:

  • Department of Energy (DOE)
  • National Petroleum Council (NPC)
  • Secretary Hazel O'Leary
  • Deputy Energy Secretary William White
  • Senator David L. Boren (D-Okla.)

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