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INDUSTRY

FACTS

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As a nation

The United States

has emerged as the undisputed worldwide leader in oil and natural gas production, a development that bodes well for the nation a whole, considering hydrocarbons are expected to account for at least 78 percent of global energy needs through 2040. Illinois’ oil production industry continues to be a key contributor the United State’s newfound energy dominance. Here are some key industry facts.
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Many Illinoisans may be surprised to learn that the state has a long and illustrious history of oil production. More than 3.75 billion barrels of oil have been produced in the Land of Lincoln since commercial production began more than 120 years ago. According to the Illinois Historical Journal, the state’s first commercial oil well was developed in Montgomery County in 1889. Larger-scale commercial production began in 1904 with the discovery of oil in the shallow fields of Clark County in eastern Illinois. But it wasn’t until landmark discoveries in Crawford County in 1905 and 1906 that the Land of Lincoln truly established itself as a major oil producer.

1906

Illinois’ First Oil Boom

Despite being discouraged to explore in Illinois by prominent geologists of the time, West Virginia wildcatters Michael L. Bendedum and Joseph C. Trees leased 50,000 acres in Crawford County and in the summer of 1905 drilled 930 feet on the Robert D. Athey farm, where they completed the Robert Athey #1 discovery well. The well produced 25 barrels per day, according to author Keith Miller’s book “Wildcats Along the Wabash,” and sparked renewed interest in exploration in Illinois. A year later, the Mahutska Oil Company struck and incredible well on the J.W. Shire farm in Oblong Township that initially produced 250 barrels per day, launching the Southeastern Oilfield and Illinois’ first oil boom. The Southeastern Oilfield nearly single-handedly catapulted Illinois to the status of being the country’s No. 3 oil producer from 1907-1912.

Norma Jean Donnay wrote in a 1996 article that Robinson’s population more than doubled during the first year of the oil boom.

Donnay also wrote that the Southeastern Oilfield was responsible for 98 percent of the state’s production up until about 1936.

After hitting 33 million barrels in 1910, Illinois oil production dropped off significantly over the next 25 years. But seismic exploration and drilling technological advances led to a sharp increase in production in the late 1930s, leading to a second Illinois oil boom that would somehow dwarf the first.

1937-1940

Illinois’ Second Oil Boom

The years 1937-1940 were a landmark era for Illinois oil production as five major oilfields were discovered: The Clay City Consolidated Field (Clay, Wayne and Richland counties – 1937), the Louden Field (Fayette and Effingham counties -1937), the Salem Consolidated Field (Marion County – 1938), the New Harmony Consolidated Field (White, Wabash and Edwards counties – 1939) and the Dale Consolidated Field (Franklin, Hamilton and Saline counties – 1940). Details about the oil booms in Wayne, Clay and Marion counties can be found in Donnay’s outstanding article.

National Public Radio reported in 2021 that,

“By the end of 1937, there were 200 new producing wells in Illinois: 85 in Marion County, with 18 of them on the Merryman Farm” near Patoka, where NPR reported a discovery by Adams Oil and Gas company set off “a southern Illinois oil boom that lasted half a century.”

Illinois nearly tripled its oil output in 1937 alone and The Decatur Daily Review called it a “New Heyday in Little Egypt.”  But even bigger things were in store in 1938. That is when the Salem Field in Marion County was discovered and produced more than 20 million barrels in its first 12 months of operation from July 1938 to July 1939. Marion County produced 93 million barrels all by itself in 1939.

Salem Field production peaked at a remarkable 95.27 million barrels in 1940 (261,000 barrels per day), establishing it as the second-largest oilfield in the United States at the time.

Similar production was seen just to the north when the Louden oilfield  was discovered. That field has produced more than 400 million barrels to date.

Spearheaded by the discovery of these new major oilfields, the state saw its oil production jump from 7.4 million barrels in 1937 to 24 million barrels in 1938. Production nearly quadrupled to just under 95 million barrels in 1939 and then peaked at 147.6 million barrels in 1940. That total represented 11 percent of overall U.S. production that year and nearly 7 percent global production, outpacing Iran and Iraq’s combined output and exceeding the total production of every other nation with the exception of Russia and Venezuela!

The surge in production couldn’t have come at a more critical time for the United States, as Illinois’ oil production helped the Allied Forces emerge victorious in World War II. CNBC recently reported that six out of every seven barrels used by the Allied Forces during World War II was produced in the United States. Illinois was responsible for a significant chunk of that total, producing more than 470 million barrels from 1941 to 1945. In fact, FDR is said to have once stated “Thank God for Salem, Illinois” in reference to the oil boom in that part of the state during that time. Bolstered by the Illinois oil boom of 1940, the U.S. was the source of three-fifths of global oil supply by the time WWII began.

After producing 894 million barrels in the 1940s, Illinois enjoyed a mini-boom in the mid 1950s, as new technologies such as hydraulic fracturing and large-scale secondary recovery projects regularly pushed annual production over the 70 million barrel threshold. Though output has declined since that hay day, Illinois production has remained steady over the past 20-plus years at an average of more than 9 million barrels per year. Some believe that potential future development of the New Albany Shale could push production back to previous heights.

For more on the Illinois oil industry’s rich history, be sure to visit theIllinois Oil Field Museum in Oblong.

Illinois

Oil Production Facts

Illinois oil production has remained remarkably steady through good economic times and bad over the past 20-plus years at an average of more than 9 million barrels per year.
Illinois currently ranks 16th out of 31 oil producing states in annual production, with production occurring in 45 counties. Of the more than 14,000 producing oil wells in Illinois, more than 90 percent are “stripper” wells that produce 1-2 barrels per day. Stripper wells account for 80 percent of U.S. wells and 9.5 percent of overall U.S. oil production in 2017 (781,000 barrels per day).
According to the Energy Information Administration, there are more than four billion barrels of unrecovered moveable oil in Illinois’ reservoirs. This is roughly what has been produced in the state since commercial production began in 1905.

Click on year to see Monthly Production by Illinois County

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Illinois Oil Producing County Facts

• 8.25 Million Barrels of Annual Production • $104 Million in Ad Valorem Tax Revenue from 2007 to 2020 • More than 4000 Directly Employed

HYDRAULIC

FRACTURING

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Hydraulic fracturing, or “fracking,” is a well completion technology that has been safely used in the Illinois Basin since the 1950s to maximize oil production. Fracking occurs after drilling has been completed and involves pumping fluid — typically 99.5 percent water and sand, with an additional mixture of chemical additives — into the target formation at pressure in order to open up small fractures and allow oil and gas to flow through the rock.
In recent years, fracking has been coupled with horizontal drilling to develop oil and natural gas resources from tight rock formations in several regions of the United States, propelling the United States to the status of being the world’s top crude oil and natural gas producer. For more on the high volume horizontal hydraulic fracturing, see the following Energy In Depth video.
Although Illinois has significant potential for New Albany shale development using horizontal drilling and high-volume hydraulic fracturing technologies, such technologies have not been employed in the state thus far. However, hydraulic fracturing remains a critical component to the conventional vertical well development that has been taking place in the state for more than a century.

Though hydraulic fracturing (HF) is not a new technology, its prevalence in facilitating the current U.S. oil and natural gas boom has prompted the “Keep It In the Ground” movement to spread misinformation. Below are some common myths, followed by the facts…

MYTH #1: Hydraulic fracturing fluid chemicals are “secret.”
FACT: Only the specific blend of hydraulic fracturing (HF) chemicals used are subject to propriety “trade secret” protections – not the chemicals themselves. The federal Community Right-to-Know Act legally requires operators to disclose ALL fracking chemicals used on Safety Data Sheets, which are available on sites where HF stimulations occur and also must be provided to first-responders and other emergency personnel. Chemicals used in HF fluid are also disclosed to state regulators. FracFocus.org, a searchable, nationwide database, also includes a list of HF fracturing fluid additives used all across the country.
MYTH #2: Hydraulic fracturing fluid is dangerous.
FACT: Hydraulic fracturing fluid is 99.5 percent water and sand. The remaining .5 percent is most prominently comprised of guar or xanthan (basically ground up beans), surfactants (laundry detergents) and compounds that prevent bacteria from forming in the well bore. Many of the additives used in HF fluid are common household chemicals we use every day. All additives used are present in such low concentrations that they present no threat to the public.
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Franklin Well Services technical manager Jerry Robinson demonstrates the composition of the typical Illinois Basin hydraulic fracturing fluid in the following video.
MYTH #3: Hydraulic fracturing poses a systemic threat to groundwater.
FACT: More than 30 scientific studies have concluded hydraulic fracturing poses no major threat to groundwater. Many of those studies examined groundwater pollution and specifically ruled out hydraulic fracturing as the cause. Most notably, a landmark 2016 U.S. Environmental Protection Agency study concluded that, “[H]ydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.” The EPA reached this conclusion even after expanding the definition of HF to include a wide range of other oilfield activities, demonstrating the safety of the entire development process. Collectively, the current body of research has examined more than 14,500 water wells across the United States and found no evidence to support the oft-repeated claim that HF poses an inherent threat to groundwater. Two of the studies that find no evidence of groundwater impacts from HF were even partially funded by anti-HF groups.
MYTH #4: Hydraulic fractures can grow upward thousands of feet through solid rock and reach freshwater aquifers.
FACT: The energy required to create such a vertical fracture is impossible to generate. A 2013 Gradient report states “there is not scientific basis” for the claim that HF fluids can contaminate groundwater from depth, also concluding, “[I]t is implausiblethat the fluids pumped into the target formation would migrate from the target formation through overlying bedrock to reach shallow aquifers.”
MYTH #5: Hydraulic fracturing causes widespread earthquakes.
FACT: Earthquakes linked to the actual hydraulic fracturing process are extremely rare and generally not felt on the surface. Induced seismicity is more commonly linked to saltwater disposal, an entirely separate process from HF. Earthquakes linked to saltwater disposal are rare as well. In Illinois specifically, there has been no credible link induced seismicity attributable to either hydraulic fracturing or saltwater disposal, even though thousands of HF treatments have been conducted in the Land of Lincoln and thousands of saltwater disposal wells have operated in the state for decades.
See the following Illinois State Geological Survey infographic for an illustration of the vertical hydraulic fracturing process that is conducted in Illinois and the high volume hydraulic fracturing used to complete many horizontal wells to develop shale and other tight-rock reservoirs in places like the Permian Basin and North Dakota.

ECONOMIC

IMPACT

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Illinois oil production pumps billions of dollars into the Land of Lincoln’s economy and plays a particularly important role in the economic viability of many rural areas where production occurs.

A recent RCF Economic & Financial Consulting analysis and IPRB review of the latest Illinois Department of Revenue data finds the Illinois oil exploration and production industry:
  • Is responsible for 4,000 direct jobs
  • Has directly and indirectly created 14,000 jobs
  • Generates more than $3 billion in direct economic output each year
  • Generates $770 million in annual personal and business income
  • Provides royalty income for more than 30,000 Illinoisans
  • Provides $330 million in annual Illinois tax revenue (and more than $700 million overall, including $380M in federal taxes)
  • Has generated an average of $7.46 million per year in property tax revenue for local communities since 2007

The oil production industry is a major source of employment in several southern Illinois counties where production occurs, as illustrated in the following graphic:

Since major oil companies pulled out of the Illinois Basin in the 1980s, the Illinois oil production industry has been comprised almost entirely of small, locally-owned companies whose profits support the local economies where they operate. Nearly half of workers in the Illinois oil production industry are independent owner/operators or independent contractors, while 83 percent of E&P firms with payroll have 10 or fewer employees. Anything but “Big Oil,” Illinois oil producers are our friends and neighbors.
In addition to the economic impact attributable to the oil production industry – also known as the “upstream” industry – Illinois’ midstream and downstream oil industries are also major economic drivers in the state, providing an additional 12,000-plus direct jobs.
Illinois is home to four refineries and leads the Midwest in refining capacity. It is also home to the Patoka Terminal, which is the second-largest crude oil storage facility in the United States. The facility hosts nearly 80 crude oil storage tanks, with a total storage capacity of more than 19 million barrels. The Patoka Terminal supplies crude oil to multiple Illinois refineries, as well as refineries across the Midwest and along the Gulf Coast. Collectively, the upstream, midstream and downstream sectors of the state’s oil and natural gas industry generated $22 billion in Gross Regional Product in 2020 — 3 percent of the overall state economy — and 16,700-plus jobs with an average salary of $104,000 a year, according to the Texas Independent Producers and Royalty Owners Association (TIPRO) 2021 State of Energy Report.

PETROLEUM

PRODUCTS

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Most folks think of transportation fuels when they think of crude oil, and probably heating or cooking when they think of natural gas. But petroleum – specifically crude oil, natural gas liquids and lease condensate – is used to make a whole lot more than gasoline.

In fact, 31 percent of U.S. petroleum use occurs outside of the transportation sector.

There are more than 6,000 everyday products refined from an/or manufactured with natural gas liquids and crude oil, including electronics, paint, cosmetics, synthetic fabrics and medicines. A 42-gallon barrel of crude oil is typically used to make 19.4 gallons of gasoline, roughly 11 gallons of diesel fuel and four gallons of jet fuel. The rest is used to make petrochemical feedstocks, waxes, lubricating oils, and asphalt, just to name a few.
Hydrocarbon gas liquids (HGLs), which are removed from “wet” natural gas, are used as feedstocks to make chemicals and plastics, as well as asphalt and road oil used for construction and road maintenance. One of the most common natural gas liquids is ethane. Ethane is heated to 1,500 degrees at facilities known as “cracker” plants. The process “cracks” ethane into new molecules that create a substance known as ethylene. Ethylene is transported, most commonly by pipeline, to a different facility for a process known as polymerization. This process converts ethylene from a gaseous form to a resin, which can then be engineered and molded into plastic products.
Americans use an average of 20 million barrels of petroleum products each day, and the average U.S. citizen uses three gallons of refined petroleum products a day. But not only are petroleum products widely used, they are absolutely essential. As the following Energy In Depth infographic illustrates, petroleum-based products –including artificial heart valves, pacemakers and various modern hospital equipment – are widely used in the healthcare industry to literally save lives.
It has been estimated that the average emergency room has 90 products derived from petroleum and natural gas. Face masks, gloves, scrubs, IV tubes, sterilization trays, monitors and ventilators are all made of petroleum or include petroleum products, while 80-90 percent of pharmaceuticals are made of petroleum. Personal hygiene products such as soap, detergents, antiseptics and disinfectants used to keep healthcare facilities sanitary are all derived from oil and natural gas.
A longtime Southern Illinois nurse recently sat down with IPRB to talk about how important petroleum-based products are to providing quality healthcare.
And although “Keep It In the Ground” groups claim solar panels, wind turbines and electric cars will soon make oil obsolete – in reality, none of those things would even be possible without petroleum! More than 70 percent of an electric car is made from petrochemicals. The United States Geological survey also estimates that 11-16 percent of wind turbines are resin, plastic or fiberglass. Oil is also used to lubricate wind turbines. Solar panels includeethylene, polyester, polyurethane and polyisobtylene-based components.
As the International Energy Agency noted in 2018, “Petrochemicals are particularly important given how prevalent they are in everyday products. They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles.”
These are just a few reasons why the “Keep It In the Ground” movement’s claims that we can do away with the oil and natural gas industry is so incredibly inaccurate. Check out the following IPRB video to find out why we are going to need a lot of oil for many decades to come.