oil

Tim Evanson, flickr Creative Commons

The Kansas Geological Survey has determined there is a connection between oil and gas production and earthquakes.

A pressurized tank manufacturing company in Garden City is laying off 80 workers because of lower oil prices.

The layoffs at Palmer Manufacturing and Tank are part of 245 jobs the company is eliminating in three states.

Spokeswoman Cathy Lyttle says customer orders have dropped because of low oil prices and fewer new wells starting in the country.

Photo courtesy of the Kansas Geological Survey

The recent drop in oil prices is translating into fewer tax dollars collected by the state of Kansas.

State lawmakers are already facing budget deficits reaching hundreds of millions of dollars.

Stephen Koranda reports on the "severance tax" that oil producers pay based on the price of crude oil.

When economists met in November to create a new revenue estimate for Kansas, they used a crude oil price of $80 per barrel.

Edmiston Oil Company

Gas prices are lower than they have been for years. On Jan.7th, you can pay $1.70 a gallon at several Wichita stations. There is hope that low prices will be a boom to the economy, but as KMUW's Aileen LeBlanc reports, the oil industry in Kansas is treading water.

"Kansas operators are price takers, not price makers," Jon Callen, Edmiston Oil Company President, says. "We just have to accept whatever the world price is going to be. If we lost total Kansas (oil) production, the world would never even notice it."

How does that compare globally?

Kansas and other states that receive taxes from the production of oil and natural gas, could face budgetary challenges as prices fall.

Two taxes are tied to oil and gas prices and production: severance and property taxes.

The severance tax is a state levy on minerals extracted from the ground in Kansas, while property taxes are also collected by the state and most local governments on oil and gas wells.

Falling crude prices are hitting oil producers especially hard in Kansas. The oil industry in the state is dominated by small, independent operators who depend heavily on the cash flow from producing wells to pay to drill new ones.

The Kansas Independent Oil and Gas Association says the low prices are causing many companies to re-evaluate their drilling plans.

Analysts say the growth in new drilling across the country will slow as drillers avoid rock that is either not well understood or known to be unproductive.

An oil refinery's $555 million expansion project is proving to be a boost to McPherson's economy.

The National Cooperative Refinery Association oil refinery is replacing its coker, which converts some residual oil into higher-value products. The project has brought cranes to the city's skyline, one of them as high as 530 feet tall.

NCRA spokesman Vince Bengston says the project should conclude by late September.

The U.S. Fish and Wildlife Service says Cheyenne Bottoms is not fully functioning and the site could be threatened by oil drilling.

Heather Whitlaw with the Fish and Wildlife Service in Manhattan says her agency opposes a recent request by a Kansas company to drill for oil there.

The group also has concerns about nearby oil production outside the Bottoms; the site is on the state's list of impaired waters because of siltation and oxygen depletion.

Approval Sought For New Oil Pipeline Through Kansas

Jul 18, 2013

A Canadian company is visiting eastern Kansas Thursday to discuss building a 600-mile oil pipeline from Illinois to Oklahoma.

Enbridge Inc. of Calgary, Alberta, hopes to begin construction early next month on its Flanagan South pipeline. The company has scheduled a series of open house sessions this week in Illinois, Missouri and Kansas.

The first session is in Iola at the North Community Building from 5-7 p.m. Thursday evening. Attendees will be able to review project maps and meet with Enbridge employees.

Kansas Oil Production Up, Natural Gas Down

May 10, 2013

A new report from the Kansas Geological Survey shows oil production in Kansas last year was up over 2011, but natural gas production was down.

Officials with the survey report the nearly 44 million barrels of oil produced last year were the most since 1995. The oil had a value of $3.7 billion.

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