Published 3/6/2013 in Local NewsBy RUTH CAMPBELL
New approaches to implementing hydraulic fracturing and horizontal drilling have created a chance for increased commerce in southwest Kansas.
Brad Nading/Telegram Mark Rude talks about vertical and horizontal drilling Tuesday during a Finney County Historical Museum Brown Bag Lunch series session on the oil industry using the fracking method. Rude is executive director of the Southwest Kansas Groundwater Management District 3.
While the technology has been around since 1947 when it was first attempted by Stanolind Oil in the Hugoton gas field, it has evolved to a point that it's peaked the interest of major oil companies to try it in new geologic formations.
Mark Rude, executive director of the Southwest Kansas Groundwater Management District, on Tuesday gave a presentation titled "Fracking ... The Facts" at the Finney County Historical Society as part of its Brown Bag Lunch Series. About 20 people attended the talk in the museum's meeting room.
The Mississippi Limestone, which among other areas covers a good portion of southwest Kansas, has produced oil and gas for Kansas for many years, but the geological formations made it a challenge. Activity started with gas exploration in the Bakken Shale in North Dakota, and this surge in oil and gas exploration began in Oklahoma and followed a similar geological setting up across Kansas "in hopes it would provide economic returns like their (the oil companies') Oklahoma activity," Rude said.
Horizontal exploration doesn't require as many wells as the traditional vertical type. Fracking is a method of enhancing oil and gas recovery from wells by injecting water, sand and chemicals into rock formations under high pressure to fracture the rock and release trapped hydrocarbons, according to a Kansas Geological Survey circular published by the University of Kansas.
"We're in the early stages of areas of interest and excitement, and therefore investment," Rude said, adding it remains to be seen how lucrative it will be for the major oil companies, as well as local communities.
But "just the interest and leasing drove up the price of leases, which was a significant benefit to landowners," he said.
Finney County Economic Development Corp. President Lona DuVall said the agency is "very supportive" of the companies that have begun working in the area the last few years.
From what she's heard, DuVall said, it could mean "decades" of economic growth for the region, as well as Finney County specifically.
The oil industry's presence also has had an impact on hotel occupancy, which has been good for those businesses and contributed to upping sales tax collections.
In recent years, questions have arisen about possible environmental problems associated with fracking, such as groundwater contamination. Rude said there is less of a worry about that in this area because of its "pancake geology" — shale, sandstone and limestone.
"Geologically, we're in a great setting ... for us to have very little chance of risk for it to affect our freshwater supply. New technology opens up the opportunity to further develop the known resources, as well as to explore resources that weren't, or were not considered, resources before this technology innovation," Rude said.
"It's kind of exciting, as long as we can remain aware and make sure it happens in an equitable and safe manner," he said.
There is also the matter of what to do with the "in place" water found in the drilling process. Most of the time, Rude said, that water is of "poor quality and not usable for most applications."
Historically, he said, if a company or independent got water in a well, "you were done economically." The difference is in the strategy to economically dispose of the water.
Previously, if an oil producer got a lot of water out with the oil, it was expensive to pump it out, let alone find a place to dispose of it.
"To spill it on the ground was considered an environmental problem, so there was great risk for even handling the stuff," Rude said.
"The successful strategy has been to develop strategies to dispose of that water while capturing the oil and gas that comes with it in a profitable manner," he said.
In this area, the in-place water can be placed into injectible wells in the Arbuckle formation.
"When wells come in, they know fairly quickly whether it's going to be economically feasible," Rude said. "... The initial production tends to tell the story as to how much water and how much oil."
Along with economic development comes the issues of having the housing, roads, labor and utilities — like water and electricity — to accommodate the potential growth. DuVall said there has been an uptick in hotels and restaurants interested in doing business here.
"The fact that they (oil companies) need water has created a water market," Rude said.
Rude noted that temporary permits are available for up to six months or 4 million gallons, but companies also have approached landowners and municipalities about buying their water.
The Kansas Department of Agriculture Division of Water Resources prefers to have one permit per location every time a company proposes a project, Rude said. Kansas is a "prior appropriation state."
"You can't use water for anything other than domestic (purposes) without having a water right for that particular use," Rude said. "... In Kansas, water is dedicated to the people of the state subject to appropriation for beneficial use by individuals."
Doris Crist, who farms wheat in parts of Finney, Kearny, Scott and Wichita counties with her husband, said she thought Rude's presentation was "very informative.
"He gave a good presentation. He knows what he's talking about. It's good to come to these things and get real information instead of just rumors," she said, adding oil and gas companies are "leasing so much land out here, we need all the information we can get."
This was a return engagement for Rude, who spoke about fracking a few weeks ago.
Finney County Historical Society Education Coordinator Johnetta Herblee said the society received several phone calls from people who missed Rude's talk the first time and wanted to see if the society could invite him back.
"Our whole goal is to be an educational (resource) for the community," Herblee said.
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