Energy by Gregg Motley

Gregg Motley. President of the Regional Economic Development, Inc. Submitted photo.


We are all painfully aware of the rapid rise in gas prices over the last year, and the significant adjustments we have made in our personal budgets to accommodate the increases. The price at the pump has almost doubled in the last 14 months, setting a new all-time high of $4.33 per gallon of regular gasoline based on the national average.

As individuals and non-oil related businesses, we know this is bad for Bourbon County, but what about our oil producers in the county? Where do we stand in oil production compared to the other 104 Kansas counties? Ninety counties reported oil production in Kansas, leaving 15 with zero production. Cherokee County was the only Southeast Kansas (“SEK”) name on that short list.

Woodson County is the SEK leader in oil production, with 3,788 wells producing 449,792 barrels of oil in 2019. Assuming oil producers are receiving $50 per barrel more than they did in January of 2021, Woodson County would have generated additional gross revenue of $22.5 million in 2019; that is over $7,200 per county resident, which is significant. Of the producing counties in SEK, Labette was at the bottom with 104 wells producing 7,168 barrels, adding annual gross revenue of $358,400.

In 2019, Bourbon County had 697 wells that produced 56,442 barrels of oil. Assuming the same $50 a barrel price increase, that generates an additional $2.8 million dollars in gross revenue, which equates to about $197 per resident. Not insignificant, but certainly less impactful than our neighbors to the west.

These numbers represent estimated additional gross revenue, but inflation has not been limited to the price of oil. Certainly these producers have incurred significant addition costs to get the oil out of the ground and to the buyers. In the process, they have added to our tax base; however, the windfall has been experienced by a relatively few residents while the cost increases at the pump have hit all of us.

The energy sector is another example of how national policies impact rural America beyond our control. We are experiencing the penalty of an overzealous rush to clean energy at the expense of our current system. Common sense would dictate that we let the pace of technological advances determine how quickly we evolve from fossil fuel to renewables. It is too soon to cancel pipelines, withhold Federal real estate from leasing, increase the cost of drilling permits and limit fracking. Additionally, our enemies benefit when we forfeit our energy independence.

Climate change is definitely a factor in all energy discussions, but the best science does not forecast an eminent catastrophe. In the meantime, let us efficiently use our existing energy resources while alternative technology advances, and minimize the negative impact to rural America and our country as a whole. An “all of the above” approach to energy, including nuclear, is best for rural America.

One thought on “Energy by Gregg Motley”

  1. All very well stated Mr . Motley!

    The best fix for inflation and ‘high prices’ is ‘high prices’. Free-markets will determine the best mix of energy sources and not government policies/mandates or executive actions. I recall something about the failure of solar-panel company Solyndra. History repeats maybe?

    In our quest to beat back inflation without going into recession or stagflation, is going to be very difficult to ‘thread-the-needle’ without causing demand/job destruction while raising interest rates beyond a neutral rate.

    Don’t expect the release of barrels of oil from the ‘Strategic Petroleum Reserve’ to relieve the pain at the pump, it hasn’t yet….has it? And when that runs out, will it be inflationary on the back-end to replenish those lost reserves?

    Thank you Greg for your informative articles.

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