Natural gas production in state falls 8 percent

? Kansas natural gas production dropped by 8 percent last year, reflecting declines from the aging Hugoton natural gas field in southwestern Kansas, the Kansas Geological Survey said.

But oil production in the state has stabilized, even increasing slightly in the past three years.

Revised statistics compiled Friday by the Geological Survey show natural gas production was 484 billion cubic feet in 2001, worth slightly over $2 billion, said geologist Tim Carr, head of the survey’s petroleum research section.

Natural gas production in the state dropped from 531 billion cubic feet the year earlier, but its value was up because of higher natural gas prices in early 2001.

Gas production in the state has been in a straight-line decline since 1996 as production declined in the big natural gas fields of southwest Kansas, Carr said.

Declines in the Hugoton natural gas field will likely stabilize over time, and the field is expected to be productive for a long time, he said.

“It will be going 50 years from now it just wouldn’t be as significant,” Carr said. “And it depends on the price too. If the price goes way down, it could shut down tomorrow. If the price goes up, it could go on for 100 years.”

Meanwhile, the state’s oil fields produced 34 million barrels last year, worth $750 million. Oil production was about the same as the year earlier. Kansas oil production has been relatively stable the past three years, a significant trend after years of annual 6 percent declines.

Bob Krehbiel, executive vice president for the Kansas Independent Oil and Gas Assn., said if prices stay at the $20 to $25 a barrel range for crude oil, the industry would be able to maintain that level of production.

“We have grown accustomed to rapid price swings, and we have learned to operate in that kind of environment,” Krehbiel said. “So when the price goes up, we know it is going to go down, so we don’t get crazy.”

The immense Hugoton natural gas field which lies beneath 13 counties in southwestern Kansas, as well as parts of Oklahoma and Texas was the source of about 59 percent of the natural gas production in the state in 2001, the agency said.

“We are rapidly adding natural gas production in eastern Kansas with the drilling of a number of wells that produce methane from coal beds,” Carr said. “But they are still coming online, and the amount of gas produced by coal-bed methane wells, though significant, is small when compared to gas coming out of the Hugoton.”

But that could change as more of the coal-bed methane wells come into production, with some estimates putting the potential production of the fields as high as 50 trillion cubic feet of gas over their lifetime. The Kansas portion of the Hugoton field has produced 30 trillion cubic feet since coming into production in 1929.

“It could potentially produce as much as the Hugoton,” Carr said.

The first wave of coal-bed exploration in Kansas was in 1991 with 69 wells drilled and 1992 with 63 wells, spurred in part by tax credits those years. But by 1999, the number of wells drilled in the coal bed region of Kansas had fallen to just three.

Last year, an estimated 100 wells were drilled, and the number of coal-bed methane wells drilled in 2002 is expected to be near 150 wells, based on current permits and activity, Carr said.