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New KGS publication analyzes oil and gas production in Kentucky

A new publication from the Kentucky Geological Survey at the University of Kentucky analyzes the production of oil and gas wells in Kentucky during 2010, the latest year for which information is available. Brandon Nuttall of the KGS Energy and Minerals Section analyzed the data and wrote the publication in response to a request from the Kentucky Oil and Gas Association. KOGA is interested in the effects of proposed U.S. Environmental Protection Agency’s New Source Performance Standards for emissions of volatile organic compounds from oil and natural gas facilities. These standards are intended to limit the emissions of such compounds, which contribute to air pollution. Emissions can occur during drilling and from flow lines, gathering lines, separators, storage tanks, and other facilities associated with producing wells. The primary implication of the KGS report is that, depending on the emissions levels set by the EPA, it’s likely that relatively few producers in Kentucky will be affected.

The 20-page publication, "Review of Kentucky Oil and Gas Production, 2010" (KGS series 12, Information Circular 30), is available for free download from the KGS publications website at Information for the publication came from publicly available 2010 production data published by the Kentucky Division of Oil and Gas.

"KGS has provided a valuable analysis for Kentucky’s operators and air-quality regulators," commented KOGA Executive Director Andrew McNeill. "The industry benefits from a data-driven regulatory process, and the information contained in Nuttall’s report will help shape practical and effective air-quality guidelines for Kentucky’s oil and gas industry."

Average daily production was determined for 5,044 oil wells and 12,940 natural gas wells. Of these wells, 955 are combined oil and natural gas producers. "The bottom line is that Kentucky’s oil and gas wells are predominantly marginal wells, known as stripper wells," Nuttall says. "The overwhelming majority of the state’s oil wells produce at rates of less than 10 barrels of oil or equivalent per day, and most gas wells produce less than 60 thousand cubic feet of natural gas per day during the months they are operated. So the vast majority are likely emitting volatile organic compounds at levels much less than the minimum level the EPA will set."

The median oil production rate of a Kentucky well is 0.87 barrel a day, and the median natural gas production rate is 12 thousand cubic feet per day. The 2010 data used in the assessment include production for both recently completed wells and older ones, the oldest having been completed in 1912.

"The data describe production across the state from both older and newer wells that could contribute to emissions," Nuttall adds. "It’s a snapshot of daily production in Kentucky that doesn’t necessarily reflect how much a newly producing well would yield."

To better characterize more recent production, 151 oil wells and 1,468 natural gas wells were selected for additional study. These wells were completed since January 1, 2005, operated for 12 months in 2010, and had at least 36 months of production. The median oil well in this category produced 2.2 barrels a day over all periods the well was operated, and the median natural gas well produced an average of 28 thousand cubic feet a day over all periods during which the well was operated.

A Breckenridge County well producing oil and gas from the New Albany Shale.