OKLAHOMA CORPORATION COMMISSION -------------------------------------------------------------------------------------- 2101 N Lincoln Blvd PO Box 52000 Oklahoma City, OK 73152-2000 2003 REPORT ON CRUDE OIL AND NATURAL GAS ACTIVITY WITHIN THE STATE OF OKLAHOMA Report Prepared By: Mr. Larry Claxton, Manager Surety and Statistics Section Technical Department Oil and Gas Conservation Division June 1, 2004 OKLAHOMA CORPORATION COMMISSION 2101 N Lincoln Blvd PO Box 52000 Oklahoma City, OK 73152-2000 ----------------------------------------------------------------------------------------------------------------------------- 2003 REPORT ON OKLAHOMA OIL AND NATURAL GAS ACTIVITY WITHIN THE STATE OF OKLAHOMA ----------------------------------------------------------------------------------------------------------------------------- Prepared by: Mr. Larry Claxton, Manager Surety and Statistical Section Technical Department Oil and Gas Conservation Division June 1, 2004 THIS PAGE LEFT BLANK INTENTIONALLY ============================================================================================================ The Oil and Gas Conservation Division issue this publication as authorized by the Oklahoma Corporation Commission. Approximately 25 copies have been prepared and distributed at a cost of 2.542 cents per page. Copies have been deposited with the Publications Clearinghouse of the Oklahoma Department of Libraries. ============================================================================================================ PREFACE The 2003 edition of the Report on Oklahoma Crude Oil and Natural Gas Activity is designed to acquaint the general public with Oil and Gas Statistics for the State of Oklahoma. This publication is a final summary of statistics for the calendar year 2003. In addition to this summary of annual statistics, the Statistical and Surety Section also publishes a Monthly Crude Oil and Natural Gas Production Report, which is a summary of provisional and revised data by county for the State of Oklahoma. This report is available to any interested parties free of charge upon written request. Also, all of the information contained within this report and on the monthly report is available on the World Wide Web at http://www.occ.state.ok.us in PDF format. All comments or suggestions for future reports or for further information should be directed to the following person: Mr. Larry Claxton Statistical Analyst Manager Statistics and Surety Section Oil and Gas Conservation Division PO Box 52000 Oklahoma City, OK 73152-2000 Phone: (405) 521-2273 Fax: (405) 522-0493 E-Mail: [email protected] ACKNOWLEDGEMENTS This publication of the Report on Oklahoma Crude Oil and Natural Gas Activity has resulted from the combined efforts of the following persons or organizations: Ernestine Gibson, IHS ENERGY, Houston, Texas Phil Zacker, Pangaea, Inc., Edmond Kerri Ward, Oklahoma Tax Commission, Oklahoma City Sherry Watson, Oklahoma Tax Commission, Oklahoma City We appreciate the assistance of all those who have helped in the preparation of this publication. Larry Claxton Statistical Analyst Manager Statistics and Surety Section Technical Department Oil and Gas Conservation Division This Page Left Blank Intentionally Frequently Asked Questions About Oil and Natural Gas ------------------------------------------------------------------------------------------------ Q: Where does Oil and Natural Gas come from? A: It comes from the Earth. In prehistoric times, tiny plants and animals lived in the sea. When those creatures died, they sank into layers of mud and sand. Over time, the Earth's crust buckled and put those deposits under great heat and pressure. Over millions of years, those deposits turned into chemicals called "hydrocarbons." That's where petroleum-actually, oil and natural gas, comes from. Small amounts of oil and natural gas seep through the Earth, or naturally come up through the ground. But almost all oil and natural gas are found deep underground in the tiny holes of rocks. Geologists and engineers use high-tech equipment to search for petroleum. When they think they've found it, they drill. If there really is oil or natural gas there, its forced to the surface. Q: What is "Crude Oil"? A: We call the oil in the ground "Crude Oil" because it has to go through a manufacturing process called "Refining" to turn it into the valuable products we use daily. Those products include gasoline to run our cars, diesel fuel for trucks and trains, jet fuel for aircraft and heating oil to warm our homes. Refined oil is also used to make the plastics that are a part of the things we use every day, like computers, TV's, VCR's, CD's and much more. Q: How much oil is there? Are we running out? A: While the world holds only a limited supply of oil, we're not in any danger of running out anytime soon. The U.S. Geological Survey estimates that the Earth could hold as much as 2.1 trillion barrels of crude oil-enough to supply the world with oil for the next 63 to 95 years! In fact, though we're using more oil, we're also finding more. New technology makes that possible. So we're not going to just "run dry" anytime soon. Q: Isn't Oil only good for cars? A: Oil has many uses. And we've been using it for centuries. Oil lit lamps in ancient Sicily, Italy and was often used as medicine across Europe and America. When automobiles were invented, oil became more important than ever. Oil fueled our transportation and pushed the United States and the world into the modern age. Today, oil products fuel our planes, trains, cars and trucks and heat our homes. Oil is also used to make products that range from makeup, toys, sneakers and football helmets to aspirin, plastics and computers. The uses for petroleum products almost seem endless! Q: Does the use of oil cause global warming? A: Some people claim that the use of oil and other fossil fuels has caused an increase in the "greenhouse effect" (which traps hot air and heats the atmosphere). Actually, the greenhouse effect is part of our natural environment. Without it, the Earth would be frozen solid and we would not exist! But some scientist claim that mankind's activities are heating the Earth unnaturally, beyond what would be normal. Other scientists disagree, because there's just not enough good information about the subject. We know that the temperature over the past one hundred years has risen one degree Fahrenheit, but that is well within the natural changes in temperatures. Not much is known about how the Earth's global climate really operates, and no one can know for sure whether the use of fossil fuels has any effect on the climate. Scientists should keep a watchful eye on the Earth's climate. And their reports should be based on sound science. Q: Is the oil industry helping to make our air cleaner? A: Yes, it is. The air we breathe is cleaner than it has been in a long time. A federal law called the Clean Air Act made everyone do his or her part to reduce air pollution. Our air has been getting cleaner and cleaner. And it will get cleaner still. All major air pollutants have declined. For example, the amount of lead in the air has dropped 86 percent between 1985 and 1994, because as the law required, the oil industry stopped putting lead into gasoline. While many people blame smog and other air pollution on automobiles, this simply is not accurate. Between 1970 and 1994, says the U.S. Environmental Protection Agency, emissions from cars and trucks fell by 31 percent. And yet we drove more than twice as far as we did in 1970. The American Automobile Association says that in many cities, automobile and light trucks are no longer the first or even the second cause of summertime ozone "smog." Q: What does the oil industry do to protect the environment? A: The oil industry created six cleaner-burning fuels like reformulated gasoline, which reduces smog, and lead-free gasoline to protect the health of children. The oil industry works with the automobile industry on research projects to reduce pollution from cars to almost zero. The oil industry have made ships safer, made refineries cleaner, improved storage tanks to prevent leaks, and have asked people from across the country to recycle used motor oil when they change the oil in their cars. All of these efforts help to protect our world. The U.S. oil and natural gas industry spent $10.6 billion on environmental protection in 1994. That's equal to two-thirds of the oil industry's profit and nearly twice the annual budget of the U.S. Environmental Protection Agency. That $10.6 billion is equal to what the industry spent looking for new U.S. supplies of oil and natural gas! Q: What about electric cars? Should we switch to electric cars? A: Electric cars don't pollute, but the electric generating plants that creates the power that the cars use can pollute the air. So in that sense, the energy that electric cars need can cause problems for the environment. There's one more environmental problem with electric cars. The batteries they use will be a problem for the environment when they are thrown away. And that's only a small part of the story. Those cars have safety problems, too. If they get into an accident, it could cause hydrogen gas to escape from their lead-acid or nickel-based batteries. Hydrogen gas can burn and could cause an explosion. Also, most electric cars can't go very far. Many can travel only 50 to 100 miles at a time. It takes about eight hours to recharge, or "refuel," an electric car. On the other hand, gasoline-powered cars can be refueled in a matter of minutes, and then travel over three hundred miles. Even with all of their problems, electric cars can cost two-to-three times as much as the same vehicle with a gasoline engine. Electric cars might be an option for the distant future, if the technology can compete with gasoline-powered vehicles, and when power plants are cleaner.