Oklahoma Oil

Way back when we didn't really know what oil was worth, many people went out into the countryside and purchased the Mineral Rights on farms all over Kansas, Texas and Oklahoma.  The good news about Oklahoma oil was that no one had to pay taxes on the possibility of the value of oil, just on the production once someone drilled, and produced the stuff.

When foreign oil was cheap, a lot of wells in Oklahoma were drilled and then capped.  Why pay the State taxes on oil you could buy for $16.00 a barrel from overseas.  Well boys and girls,  those days are over.  And to compound the problems many of the owners of the mineral rights passed on those rights to their heirs and no one has really  tracked them all down. The Oil companies don't really care, they send the unclaimed money to the State of Oklahoma.  

In Kansas, the oil in the ground has an estimated value based on the first year's production and an expected life of 15 years.  When the well continues to produce beyond that time, the County where the oil resides continues to tax it at some made up value through property taxes.  None of this find oil and cap the well stuff for Kansas.  If there is oil, it has a value and is taxed.  

At our first annual family reunion at Gulf Shores, AL one senior member of the family said that at one time he worked for an oil company and he knows there are at least 100 capped wells that were drilled in the gulf of Mexico.  If that is a good number, how many do you think there were drilled and capped on land?   I predict that as the price of oil continues to climb, more and more of these inactive wells will be brought back into production.  

That won't solve our problem but there are a few solutions offered by people in the know.  First there is a move afoot to scrap diesel fuel and to put the trucks on Compressed Natural Gas.  It is cleaner and cheaper to use and should cut the amount of diesel we need and use.   The next step will be for us all to give up our luxury cars and drive smaller cars that get 50+ MPG.  So far that hasn't worked but I think the view of $5.00 a gallon oil in California has made some people a lot more aware of the need to cut down on the use of cars and/or to improve the mileage.     

It is a rainy day here in the heartland and by this afternoon there is predicted to be storms.  Tornadoes in October are not out of the question.  I think our only tornado free month has been January.  By then we get snow up to our knees and ice storms.  

Keep your powder dry and your fire going.


1 comment:

  1. MUD, there are several thousand capped wells in Louisiana (I'm guessing...but there are A LOT!).

    The US is awash in oil, and with the new fracing technology, piped up with enough natural gas to fuel us for hundreds of years.

    The problem with oil, though is not the amount...but the ability to refine it. I'm pretty sure it has been about 30 years since a new refinery was built in the US. Regulations, red tape, and politics make it damn near impossible to build the refining capacity we need to handle our supply.