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BY BOB KASARDA
bkasarda@nwitimes.com
219.548.4345 | Monday, July 28, 2008 | (3 comment(s))
As a gas station owner earning just 2 cents for every gallon of gasoline sold, Tom Young said he decided during the early 1980s to seek a greater share of the profits by drilling for oil himself.
The Plymouth resident poked around a bit in Porter County, but found what he was looking for near Fish Lake in LaPorte County. He said he drew 2,000 barrels of oil from two wells and grossed $30,000.
That venture and others under way across the state have not been profitable enough to earn Young a living. But with oil and natural gasoline prices on the rise, he believes his fortunes may have changed.
Young said he is considering reopening his wells in LaPorte County fueled by the knowledge that the amount of oil he was able to draw more than a decade ago is now worth $250,000.
Young is part of a boom of oil and natural gas exploration in Indiana being driven by record-breaking fuel prices, according to Herschel McDivitt, director of the Indiana Department of Natural Resources' Division of Oil and Gas.
"We continue to issue permits at rates not seen in Indiana for more than 30 years," he said.
The state is on track again this year to issue more than 400 permits, with most of the activity among counties to the south and southwest, McDivitt said. The DNR issued 490 permits in 2006 and 483 last year.
The only active well permits in Northwest Indiana were issued last year to the BP Whiting Refinery for existing propane and butane storage facilities, McDivitt said. The delay in issuing the permits corrected an oversight by the state, he said.
There has, however, been some oil and gas exploration in recent years across the region, McDivitt said. Aurora Oil and Gas Corp., of Traverse City, Mich., was issued permits to dig two natural gas wells in 2006 and 2007 in Lake County. Both turned out to be dry and were plugged.
Young, who was issued an oil well permit in 1991 for Porter County, said he dug a couple miles north of the former Orville Redenbacher plant in Washington Township. He said he gave up on the venture a few years later after running into opposition from county officials and out of concern he might offend nearby homeowners.
The interest in oil and gas exploration in Indiana comes as national leaders debate whether to expand domestic drilling in response to skyrocketing fuel prices.
Indiana now ranks 23rd or 24th among the states in crude oil and natural gas production, McDivitt said.
"We're not a major oil and gas producing state," he said. But, "In today's situation, every little bit helps."
The largest concentration of Hoosier oil wells is in Posey and Gibson counties, in the far southwest tip of the state, he said. The wells draw from the Illinois basin, which extends 60,000 square miles across Indiana, Illinois and Kentucky.
Posey County has more than 1,700 active oil wells and Gibson County has about 1,600 wells.
Exploring for oil and gas is not cheap. McDivitt said land leases alone can cost hundreds of thousands of dollars, in addition to permitting and consultant fees, and equipment costs.
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Tyoung wrote on Jul 29, 2008 3:39 AM:
The oil youd find.... wrote on Jul 28, 2008 9:51 PM:
MVP wrote on Jul 28, 2008 1:59 PM:
If no… then why would the Gary City Council long ago waste its time writing an ordinance prohibiting the drilling for oil? Could it be that the oil under Gary was viewed as not profitable compared to larger producing oil wells back then, but now with oil prices over $100 per barrel it could now be a profitable venture.
Hmmm…! Inquiring minds would like to know. "