The rapid decline of energy prices has proved challenging for Utah and the Division. Earlier this year no new oil wells were being drilled in the state- a first since the late 1960’s. As of July 20, there are four rigs operating, compared with 17 in 2015 and 25 in 2014.
In 2014, oil prices topped out at $100 a barrel. Last year, they bottomed at $30 and have gone as low as $20 this year. Oil currently is selling for under $50 a barrel.
The Division relies heavily on monies generated from a conservation tax, which is two-tenths of one percent (.002) of the value of oil and gas produced and saved, sold, or transported from the field in Utah where the oil or gas is produced. Due to the rapid decline of the value of oil and gas, the Division is facing budget shortages impacting the oil and gas program and administration. Voluntary out-of-state travel restrictions have been implemented and vacant positions have not been filled.
We monitor the prices daily and hope for a rebound of prices in the near future.