Don't forget importance of area oil industry

One wag suggested that oil wells in Southwest Nebraska turned some so-so farmers into great farmers.

Yes, oil revenue can help the bottom line, but if that land is actually farmed, it probably consumes more oil than it produces, and with the advent of the ethanol industry, the farming and energy industries are even more intertwined.

Crude oil prices down by a third since the last peak in early 2022 haven’t encouraged exploration, with Nebraska’s production dropping from 1.7 million barrels in 2021 to 1.6 million in 2022, a 6.6 percent decline, according to state sources.

Meanwhile, in 2020, Nebraskans consumed more than 44 million barrels of petroleum production, or 122,079 barrels per day, with the state producing only 1.67 million barrels or 4,586 barrels per day, which is only 3.76% of the petroleum consumed by the state.

Gas prices have moderated some, down more than a dollar a gallon from a year ago, according to AAA Nebraska, but prices are still high enough to create hardships for those of us in rural Nebraska miles from some vital services.

Perhaps we can take some solace in the oil industry’s contribution to the regional economy.

According to state figures, Southwest Nebraska oil production in 2021 included 17,317 barrels of crude from Chase County, 279,282 Dundy, 13,965 Frontier, 10,586 Furnas, 19,209 Hayes, 565,881 Hitchcock and 153,227 from Red Willow County.

Oil hasn’t always been an important industry for Nebraska, of course.

While it was rumored to be present in the southeast part of the state as early as 1883, it wasn’t until the 1930s when exploration began in earnest, spurred in part by a $15,000 offer by the Nebraska Legislature to the first oil well in the state that produced 50 barrels a day for 60 consecutive days. The prize was finally won by the Pawnee Royalty Co.’s third well, Bucholz No. 1, which began pumping in April 1940 and produced 169.5 barrels a day for the first 60 days.

We don’t have specific figures at hand, but the area oil industry definitely provides jobs in drilling, extraction, transportation and support services, with that money multiplied through the economy.

Oil is also an important part of local and state tax revenues to help fund public services and infrastructure.

Ethanol and biofuel have become an important part of the energy equation in America’s on-again, off-again efforts to become energy independent; perhaps it’s time to take another look at what we can do to boost homegrown oil production.