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The new, high-tech oil wells

Jim Suber: View from Rural Route 8

By A Contributor

Resting in the aftermath of a rare rain that exceeded one inch and left muddy trails, I was idly watching a cable business news channel when with shocking suddenness onto the TV popped a picture of new high tech oil wells in south central Kansas.

The announcer said that experts were predicting the play in the geological zone where the oil is, the Mississippian Lime, should exceed the famous find in North Dakota.

Finally, Kansas made the national news about something other than tornadoes, extremists, funny laws, the Wizard, the Goat Gland Doctor, the pancake race, and KU basketball. This could really be big, and brings back the old saying, which was borderline crass: “Ain’t nuthin’ better than raisin’ bluestem and drill stem on the same ground.”

If it all falls into place the way the experts are now thinking that it will, the oil boom in Kansas will be just what the doctor ordered to help the state’s economy. Jobs and new oil money equal tax revenue, which perhaps will ease the burden on the rest of us.

Right now, viable oil wells are good news in what is otherwise a very dry state. They’re coming in right in some of the same spots where wheat either has just been harvested or is soon to be reaped. And in many of those wheat fields, the crop suffered significant declines in its last days before ripening because of burning heat on high winds and continued drought.

Unless Congress jumps in and does something about the federal level of taxation that looms in 2013, any bloom by the Kansas oil boom will be seriously diminished.

Meanwhile, the outlook for prices is not necessarily good for farmers right now, but those kinds of things can change in a hurry with a crop failure in a big producing region anywhere in the world, or a political storm some place that affects global markets. For so many years farm commodities prices were dirt poor with the thinnest of margins. Many forget when looking at the comparatively high prices of the past few years that input costs have risen in lock step with the sales prices.

In those old days not too many years ago when corn was $1.95 a bushel and wheat $2 a bushel and soybeans $5 a bushel, farmers first tried to have something to sell. Having nothing to sell when prices are high is a galling defeat. Having something to sell at whatever price is better than zero. Today’s pressures are just as great, but the dollars at stake are far greater now in terms of what is at risk. In some highly intense areas of corn production, or example, the costs of raising a crop can be more than $500 an acre.

All of which is to say again, oil might be the preferred commodity to ship from many farms and ranches in the old Wheat State in the near future. I say good luck to all the lucky ones who will have it, and good luck to all of us who will certainly benefit from it in many ways. Refined transportation fuels from crude oil, after all, are necessary to continue the way we live and farm in the United States and most of the rest of the world. Bluestem and drill stem—a great combo.









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