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    e natural gas and oil produced in this country

provides vital energy to Americans every day. Produced under the strongest environmental and safety regulations in the world, these domestic resources are key to the country’s economic and energy security.

But even at current prices, many of the small, “mom and pop” operators who typically run these wells find them expensive to maintain. Last year, plugged and abandoned wells resulted in a loss of $1.77 billion in economic output, $369.2 million in earnings reductions and 8,223 jobs.

Often overlooked, marginal, low-volume oil and natural gas wells contribute significantly to the nation’s energy supply. In 2006, these wells con- tributed nearly 18 percent of oil and 9 percent of natural gas produced in this country.

For more than 65 years, the IOGCC has rec- ognized the significance of marginal wells and has documented their production. is year’s numbers again tell an encouraging story of tiny wells, small companies and individual entrepre- neurs. While marginal gas production decreased slightly, the number of marginal gas wells rose by 3 percent over last year. Marginal oil production increased by 4 percent.

To combat the premature abandonment of margin- al wells, research and technology must be strength- ened. e National Petroleum Council agreed with the IOGCC in its 2007 report to the U.S. Department of Energy Secretary Samuel Bodman.

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    e council cited support of regulatory streamlin-

ing and research and development programs for marginal wells as key components of slowing the current decline in domestic production.

In fact, any measure that increases an extra barrel of oil per well per month would result in more than 5 million barrels of extra oil each year, the equivalent of two super-tankers of imports.

So what does this mean to the average American? In 2006 every $1 million of marginal oil and gas produced created more than 9 jobs. In addition, states with marginal production collected $1.26 billion in severance taxes - money that in many states is used for education.

It is the IOGCC’s hope that its annual Marginal Well Report shines a light on the importance of these wells so that operators, the states that regulate them and the consumers who are affected by them have the information and resources to ensure the resources they make available are not wasted.


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