Colorado Oil Industry Struggles with Drilling Permits Despite High Prices
The oil and gas industry in Colorado is experiencing a lag in drilling permits despite high oil prices. West Texas Intermediate (WTI) is trading near $101 a barrel, but the state has only issued 335 drilling permits over the past two years.
Colorado operators have filed for permits at a rate of about one-third of what it was just a decade ago. The average time from OGDP submission to hearing has increased to 257 days in 2024 and 297 days in 2025, making companies more selective with their investments.
The state's regulatory environment is cited as a major factor in the decline of drilling permits. New cumulative-impacts and environmental-social-performance rules took effect in December 2024, causing some operators to slow down or halt new projects.
Despite this, production levels have remained relatively stable due to longer laterals and a high-quality remaining inventory. However, the lack of new wells is expected to lead to a decline in production in the coming years if the trend continues.