Is Kansas about to hit the jackpot?
Gov. Sam Brownback greeted them and got to the point: Vast amounts of oil and natural gas are trapped in a rock formation in the state known as the Mississippi Lime. And energy companies are beginning to work it.
If the formation gushes as much oil and gas as hoped, Brownback said, it will help move the U.S. toward energy independence and boost the Kansas economy with billions in investment and income and thousands of good-paying jobs.
"This is a great day," Kansas Commerce Secretary Pat George told the conference, organized to talk about how small businesses could prosper from the possible boom.
Mark Richardson, a retired Kansas farmer at the conference, said "there are very few people I know who would be reluctant to have an oil well on their property. It's a definite yes about the optimism."
It's not yet known just how much oil and gas could be retrieved from the Mississippi Lime formation, but many hope it could be the biggest thing for the Kansas energy industry since the state's oil production peaked in the 1950s.
Some residents have already hit the jackpot. Energy companies have leased drilling rights on millions of acres stretching across much of southern Kansas and jutting into the northwest part of the state. About $2 billion has been poured into leases.
But the real money will come from the drilling the wells, already under way. The number of permits for horizontal hydraulic drilling, or fracking, used to help unlock the energy in the underground rock, has tripled since January.
A handful of southern Kansas counties are already seeing full hotels and packed restaurants. Job fairs are cropping up and companies that serve the energy industry are seeing a pop in business.
Kiowa, Kan., which a few years ago was told it and other small towns in the region were certain to decline, sees a lifeline.
"We've been praying for growing pains," said Mayor Brandon Farney. "It's an exciting time."
Many hope for a boom like the one that has reshaped the economy of North Dakota, which is now producing more than 700,000 barrels of oil a day, making it the second largest producer in the United States behind Texas. North Dakota will outclass Kansas in energy production, the experts say, but the increased production in Kansas will join North Dakota's to help wean the U.S. from oil imports.
"Kansas is going to be a major player in this," Brownback said.
Despite the optimism, there are still questions about just how big it is going to be.
A learning curve
The Mississippi Lime formation was created 330 million years ago. It's a limestone layer stretching under more than 17 million acres in northern Oklahoma, much of Kansas and a small corner of Nebraska. In Kansas, the limestone is up to 1700 feet thick at a depth of roughly 3,500 to 6,000 feet.
The energy companies are in the middle of a learning curve in how best to drill and recover the oil and natural gas from the "Mississippian play," as it's called in the industry. They, for example, have to find the sweeter spots to drill in the formation.
But in what could be the game changer for Kansas, the oil and natural gas are at relatively shallow depths, making for less costly wells. A Kansas well, for example, costs about a third as much as a North Dakota well.
