The labor of energy: Oil in central Illinois

2012-09-02T06:00:00Z 2012-09-03T09:27:06Z The labor of energy: Oil in central IllinoisBy Tony Reid | Tony.reid@lee.net Herald-Review.com
September 02, 2012 6:00 am  • 

Editors' note: Illinois has an abundance of energy sources. Over the next four days, we’ll look at five:

Sunday: Oil

Monday: Coal and nuclear

Tuesday: Ethanol

Wednesday: Wind

DECATUR — A bountiful new oil well on Decatur’s southern edge has storage tanks emblazoned with scripture urging us all to embrace faith as we confront the future:

“Trust in the Lord with all your heart, and lean not on your own understanding. In all your ways acknowledge him and he will make your paths straight.” Proverbs 3:5-6.

It sure sounds like a plan to the faithful at the nearby Bethlehem Presbyterian Church. The Production Energy LLC oil company, which mixes the Holy Spirit with its crude extraction, has another well on church-owned land which hasn’t hit the big-time yet, but the 80-strong congregation is praying the Lord will eventually provide and give them expanded means to do good works for his name’s sake.

“We don’t want to build some big new church,” said trustee Brian Albert, 52, who worships in a sanctuary dating to 1911. “But hopefully we will be able to do more missions work; we would give the oil royalty money to that.”

It would be easy to think Bethlehem Presbyterian hasn’t got a hope or a prayer of striking it rich, but think again. Oil production pumped from reservoirs buried under the scorched corn and beans of the Illinois farmland is ticking over nicely, and crude cash is helping to lubricate an Illinois economy desperate for good news.

The oil well on church property is barely 100 yards from the well with the Biblical quotes and that well has been like manna from heaven: it’s so productive it earned Iowa-based Production Energy the “Wildcatter of the Year” award from the Illinois Oil & Gas Association in March. The new well gained top honors by pumping out more than 175,000 barrels of crude in just nine months. Eddy Ekis, an oilfield pumper who works for Production Energy, put that in perspective by explaining a typical good well in the small scale production standards of Illinois might pump 10 barrels a day.

“But here, near Decatur, we’re looking at 100 to 150 barrels a day,” said Ekis, 27. “It’s kind of like they hit the honey hole.”

Decatur and Macon County lie at the northern edge of the most prolific oil production area in Illinois, which is mainly concentrated in the southern and western parts of the state. Most wells, recognizable with their little huddle of above-ground tanks and a nodding pump jack nearby, are very small and produce maybe two barrels a day flat out. Natural gas production in the state is tiny, and oil wells are where the money is.

And yet while many of those wells may indeed be small, there are an awful lot of them. The Illinois Oil & Gas Association, which speaks for the industry, says there are some 16,000 active wells in 43 Illinois counties and, at the last count, these pumped 9 million barrels of crude a year. Add them to what are known as other “marginal wells” and you’ve got a production source worth 915,000 barrels of oil a day, or about 18 percent of total United States domestic production.

The landlocked oil industry in Illinois employs more than 4,000 people directly while it’s estimated that related economic activity and spending create jobs for another 10,000 employees in various other industries. Cash-wise, the Oil and Gas Association says the financial output of the state’s oil extraction efforts adds up to $4.81 billion a year.

There are also many thousands of lucky landowners collecting royalty checks for the oil sucked from beneath their farms. Those growing wealthy aren’t always keen to brag about their greasy good fortune, but you can get an idea from talking to Darrell Hines, the managing member of Production Energy. “One landowner I know is building a shed on his land that is so big it will be able to house the helicopter that he is buying,” said Hines, 65.

“Royalties depend on the amount of oil production, but I can tell you, for some people, it can amount to income that’s more than can be measured in tens of thousands of dollars.”

What’s surprising is that Illinois’ real oil glory days all lie in the past. The buried crude is the remains of dead sea critters geologically cooked for millions of years after a vast sea that once covered the state retreated, and the resource has long been known about. Extraction picked up steam after 1905 and peak Illinois production came around 1939 when it nudged 150,000 barrels a year. Then, after another spike in the 1950s, production slid into a slow and steady downward glide.

But the oil barrels continue to roll, even if at a slower pace, thanks to technological developments and rising crude prices that make it both possible and worthwhile to go after untapped supplies previously dismissed as not worth the effort. Fracking, the process of using water under pressure to open up oil-bearing rock pores, has been crucial in getting many wells flowing. It’s not known for causing problems in Illinois but has attracted controversy in other states where people have feared for the safety of their water supplies.

Hines says the only cloud on the state’s oil horizon right now is talk that some lawmakers might try to move a bill to restrict fracking. “In the entire history of fracking in Illinois, which goes back many, many years, there has not been one single — not one single — incident of contamination of water,” said Hines. “Moving some legislation to solve a problem that doesn’t exist would absolutely kill the oil industry.”

The Oil & Gas Association is confident lawmakers will not want to strangle the black and golden goose and, in the meantime, reports an upsurge in activity as oil companies seek to lease oil rights and prospect new sources. Brad Richards, executive vice president of the Oil & Gas Association, says new leasing activity has topped $100 million and rising. He said the “smart money” is coming back to chase Illinois oil, fueled by new technologies like horizontal drilling which holds the promise of opening up more hard to reach oilfields.

“One gentleman I know referred to it as the ‘Miracle of horizontal drilling,’” said Richards. “We’re pretty excited about the future.”



Illinois’ oil is produced in the state’s far southeastern counties, the so-called “hydrocarbon kitchen,” where New Albany Shale converts organic matter into oil. Most oil migrates upward through cracks and fissures, traveling through layers of sandstone, limestone or dolomite. Oil will travel sideways if its path toward the earth’s surface is blocked. That migration means oil fields also exist in most of west-central, central, and south-central Illinois.

The oil, gas and water drain into wells drilled into those fields. Some of the biggest oil fields in Illinois have more than 2,000 oil wells and more than 200 million barrels of oil (8.4 billion gallons). The majority of Illinois wells produce 1.5 barrels a day.

The first attempt at drilling oil wells was near Champaign in 1853, but it produced only “swamp” or “drift” gas from glacial till.

Illinois was one of the nation’s leading producers of oil during the 1940s and 1950s, with peak production between 1955 and 1963. By 1998, there were 30,000 active wells in the state. There are 650 oil fields in Illinois, primarily in the southern half of the state.

Fewer than half of the holes drilled actually strike enough oil to repay drilling costs. The deepest well ever drilled in Illinois was more than 13,000 feet deep.

The state has 32,100 oil and gas production wells, 10,500 Class II injection wells and 1,750 gas storage wells, all controlled by 1,500 operators.

SOURCES: Illinois State Geological Survey, Illinois Department of Natural Resources

Oil vs. natural gas

A “rocking pump jack” (the bobbing, vaguely horse-like machine) sits at a well head; when it rocks up and down, it opens and closes valves in a submerged pump connected to the surface by long steel rods. Each strike brings a cup or two of fluid to the surface, generally a mix of soil and water, which is sent to a separator tank. Oil, which is heavier than water, separates and flows to one of two storage tanks; water flows to the other. The oil is stored in a large tank until it is transferred by pipeline or truck to a refinery. The water usually is pumped back underground.

Natural gas bubbles out of the oil when oil is brought to the surface. It is similar to opening a can of soda and having bubbles of carbon dioxide released.

Natural gas is separated in a gas separator and may be prepared for a gas pipeline, to power the motor that runs the pump jack, or is burned to safely dispose of small quantities.

SOURCE: Illinois State Geological Survey

Oil fields

(Alphabetical, by county, within combined newspaper circ. area; all are “oil fields” unless otherwise noted)

Bond: Woburn Consolidated, Beaver Creek, Old Ripley

Christian: Assumption Consolidated, Edinburg West, Kincaid Consolidated, Mount Auburn Consolidated, Roby East

Clark: North Johnson, South Johnson

Clay: Clay City West, Kenner, Kenner West, North Kenner, Oskaloosa, South Kenner, West Seminary, Xenia, Sailor Springs

Coles: Cooks Mills Consolidated, North Mattoon

DeWitt: Parnell

Edgar: Elbridge

Fayette: Loudon

Livingston: Ancona Gas Storage

Logan: Lincoln Gas Storage Area

Montgomery: Hillsboro Gas Storage Area

SOURCE: Illinois.hometownlocator.com

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