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Missouri’s oil potential draws increased interest

Thursday, June 19, 2008 | 8:24 p.m. CDT; updated 1:10 p.m. CDT, Tuesday, July 22, 2008

COLUMBIA — The number of applications for oil and gas exploration in Missouri has surpassed last year’s total in the first four months of this year.

Jeff Jaquess of Missouri’s Department of Natural Resources said the rapidly growing number of applications is difficult to handle.

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“About September 2007 it went through the roof. Before that, I only permitted 30 to 40 wells in a year,” Jaquess said. “I’ve already permitted more in January of ’08 than in all of 2007. I’d say we’re pushing 200 (applications) at the present time.”

There were 144 applications for exploration submitted in the first quarter of 2008, compared with 129 total in 2007. In 2006 there were only 41 applications submitted.

Of the 31 oil-producing states, Missouri ranked 29th in the amount of oil production in 2005, according to a chart on the Energy Information Administration Web site, eia.doe.gov.

However, Mimi Garstang, director of the Division of Geology and Land Survey, said in a news release that the “interest in Missouri’s heavy oil has significantly increased with higher energy prices.”

Heavy oil, also known as pitch or asphalt, is denser than conventional oil, which makes it more difficult to extract. It is called tar sand when it is buried in sand or sandstone.

Most of the state’s tar sand is in western Missouri in a bedrock structure known as the Bourbon Arch, which might hold an estimated 1.4 billion to 1.9 billion barrels of oil reserves, according to the summer 2007 issue of Geologic Column of Missouri, a publication of the Natural Resources Department.

Using the 2007 oil prices of $55 to $65 per barrel and the technology and recovery rates of last year, the estimated value of Missouri’s heavy oil is $35 billion to $42 billion, according to the publication.

The oil potential has attracted the interest of many oil companies. One company, Canada-based MegaWest Energy Corp., has already begun the Marmaton River Project in Vernon County to extract some of Missouri’s heavy oil.

MegaWest specializes in enhanced oil recovery using steam injection techniques to help thin the oil in the ground to make it easier to remove.

David Sealock, vice president of operations for MegaWest, said the Marmaton River Facility has an estimated production capacity of 500 barrels per day. The project was completed in the spring, and steam injection started March 16, he said.

“We expect the steam to create a response in oil production in a three- to four-month period,” Sealock said. “Based on the information we currently have, we could see development of 10 or more similar facility projects in Missouri (for MegaWest alone).”

Heavy oil is an unconventional resource that will supplement the United States during the transition to a renewable energy, Sealock said.

MegaWest is currently submitting applications to expand the Marmaton River Project and has received approval for a second project in Missouri called the Grassy Creek Project. MegaWest submitted 26 percent of the 144 applications in the first quarter of this year.


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