Missouri oil production up, but problems remain

KANSAS CITY (AP) - Oil production in Missouri has more than doubled since 2008 but the state's complex geology presents significant hurdles to expanding the business in the state.

The state produced 201,000 barrels of oil in 2013, compared with 98,000 barrels in 2008. Most of the increase came from Cass, Jackson, St. Louis, Vernon and Atchison counties, according to the Missouri Department of Natural Resources.

"There's a lot of oil in the area, but it's a hard fight to get it," said Jim Long of Nevada, who has drilled several wells in Missouri.

Missouri's oil production still would be enough only for 15 minutes of U.S. oil supply and the difficulty of extracting it has kept most large oil companies away from the state. Missouri oil typically starts around 150 feet below the surface, which doesn't provide enough natural pressure to be easily recovered. And much of the oil is heavy and flows slowly.

Most producers must inject steam from large boilers of water heated with natural gas into the oil to thin it and help it flow.

"That's where Missouri really struggles," said Shari Dunn-Norman, a professor of geosciences and petroleum engineering at Missouri University of Science and Technology in Rolla. "I think it's waiting for a technology, to produce it economically."

Producers inject steam from large boilers of water heated with natural gas into the oil to thin it and help it flow. Cheaper methods have to be developed for the state to meet its full potential, Dunn-Norman said.

The state had 601 producing wells last year, which recovered $17.7 million in oil, according to the DNR. That came despite some concern about a recent plunge in oil prices.

"We're watching it (the oil price) but we still have plans to drill," said David Bleakley, vice president of Colt Energy, a company out of Fairway, Kansas, which drills in the Clark-Miller Oil Pool near Grandview, pulling up about four barrels a day from roughly 30 wells.

In 1979, the Missouri Department of Natural Resources estimated the state could have 1.4 billion barrels or more of heavy oil in western Missouri but the state does not have good maps of its oil resources.

Palo Petroleum, an energy company based in Dallas, chose a site west of Nevada in Vernon County to try new technology that involved using a single horizontal well to inject steam and recover the oil. It didn't work but three years later the company believes it has the answer although it will need some time to be sure it works and is economical.

"We believe we have it figured out," said James Graham, president and CEO of the company. "We're hoping it doesn't have any more curves to throw at us."

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