Kentucky Petroleum Industry Strengths, Weaknesses, Threats, and Opportunities, Kentucky Geological Survey

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Kentucky Petroleum Industry Strengths, Weaknesses, Threats, and Opportunities

Kentucky's existing oil and gas infrastructure is extensive
Finding and production costs are low because resources are shallow
There is significant natural gas in known fields (mostly in the Devonian black shale)
Much of Kentucky's subsurface data are available in digital format
The state is centrally located for access and distribution to northern and eastern industrial markets
Federal- and State-funded oil and gas exploration research is being carried out

Industry is dominated by small operators with limited access to investment capital and research funding
Area is perceived as mature with little possibility of significant discoveries (unattractive to larger companies)
Lack of production data severely limits and discourages investment from out of state
Coalbed methane ownership is not established
Lack of coalbed methane data contributes to the perception that the resource is uneconomic
Small stripper wells must compete with offshore and overseas wells producing significantly greater volumes
Deep well opportunities are limited by the cost of technology and drilling and limited funding for exploration research

Resource sterilization (for more see Concerns)
Price volatility
Perception that oil and gas operations are in fundamental opposition to environmental issues
Abandonment of marginal wells limits opportunities for secondary or enhanced production

Drilling deeper may result in significant new energy resource discoveries (RCG, ECRB, RT, and BKRV)
Coalbed methane production could become important
Tar sands could be produced with innovative secondary or enhanced recovery techniques
Additional natural gas or oil could be produced from fields during CO₂ sequestration (see also the Devonian shale)
Alternative uses for depleted fields include sequestration, gas storage, and waste disposal
The shift to alternate fuels will create a demand for hydrogen resources that can be served by natural gas
Small-scale, distributed electric power generation may be facilitated by portable natural gas-powered engines