By JOHN P. TRETBAR
The government awarded $560 million in grants to 24 states to plug abandoned oil and gas wells, including several in our area. The Kansas Corporation Commission last week announced its plans for the first $25 million from last year's infrastructure bill. The eight target projects include 31 abandoned wells in Russell, Osborne and Rooks counties, and another 22 wells in Pratt and Barber counties. The KCC is expecting future grants adding another $33 million to the state's well-plugging fund, which has already plugged more than 11,000 wells. The first eight target projects include plans to plug a total of 2,352 wells. Of those, 2,247 are in eastern Kansas. There are also 52 wells in projects at or near the Colorado border. According to the announcement, this is only a partial solution. The state will still need to collect industry fees to pay for continuing efforts to find and plug abandoned wells.
Kansas operators completed 29 wells last week. According to Independent Oil & Gas Service, that's 1,033 so far this year. The weekly tally of 13 completions west of Wichita includes one in Barton County and one in Ellis County. Regulators in Kansas okayed 36 new drilling locations, with one in Russell County among 13 new permits west of Wichita.
The Rotary Rig Count from Baker Hughes reached 765 rigs, up four oil rigs nationwide. Texas was up two for the week.
Drilling was underway on three leases in Ellis County on Friday. Operators were about to spud new wells in Russell and Stafford counties. The Rig Count in Kansas showed 26 active rigs in the eastern half of the state, and 34 west of Wichita.
Scouting reports from Independent Oil & Gas Service show 475 wells in various stages of drilling and completion across Kansas, nearly 64% more than at this time last year. So far this year, 206 Kansas operators have spudded 972 wells, up nearly 60% compared to a year ago.
The government reported a 3.3 million barrel decline in US crude inventories, on the heels of a seven-million barrel dip the week before. The Energy Information Administration says U.S. crude inventories on August 19th were about 6% below the five-year average for this time of year.
US crude production dropped by 106,000 barrels per day last week. The tally for the week through Aug. 19 was 9,000 barrels above 12 million per day. According to a government report, that's 586,000 barrels per day more than the same week last year.
Imports averaged 6.2 million barrels per day, up 40,000 barrels per day from the week before. EIA says that's nearly two percent higher than last year, based on the four week average.
The government says members of OPEC are fast returning to the huge oil revenues of yesteryear. The Energy Information Administration predicts cartel members will earn about $842 billion in oil export revenues this year, nearly 50% higher than last year. EIA says that would be their best result in inflation-adjusted revenue since 2014.
Oil-by-rail shipments were down slightly last week. The Association of American Railroads reports 9,681 petroleum tanker carloads during the week through August 20th, down 51 carloads for the week and 6.1% less than a year ago. Traffic in Canada was down more than 300 carloads for the week. The tally is one-tenth of 1 percent higher than last year at this time.
President Joe Biden won temporary permission to once again pause energy leasing on federal lands and waters. A U.S. appeals court found the trial judge’s order against the moratorium too vague to review. The appeals court last week threw out the judge’s nationwide injunction forcing a restart of leasing from the Gulf of Mexico to Alaska. That judge must now revisit the issue, and in the meantime, Biden’s pause stands. The ruling came in a dispute between the administration and 13 energy-producing states led by Louisiana that sued to force Biden to resume leasing he paused a week after taking office. After the lower court last year issued its preliminary injunction against the leasing moratorium, the government appealed.
Saudi Aramco posted the biggest quarterly adjusted profit of any listed company on earth, driven by high crude prices and robust production. Aramco followed big oil rivals reporting a surge in profits. Net income rose to $48.4 billion in the second quarter, up from $25.5 billion a year earlier, according to a company announcement. Its free cash flow rose by 53% to $34.6 billion. The company is using the windfall to reduce debt and invest in a huge expansion of its production capacity. Bloomberg reports Aramco is betting demand will remain high even as the world looks to transition away from fossil fuels.