Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=184174
Story Retrieval Date: 4/1/2015 11:23:33 PM CST
Photo Credit: www.bizbuysell.com
Some people merely complain about higher gas prices. Others see opportunity.
The number of oil drilling permits issued in Illinois nearly tripled from February to March this year, according to the Illinois State Geological Survey.
“There’s no question that when oil is priced higher the incentive to drill goes up,” said Brad Richards, executive vice president of the Illinois Oil and Gas Association in downstate Mount Vernon. He added that many oil transport roads in Illinois are closed during the winter, so some of that permit increase is seasonal.
Other experts caution that backyard drilling – even if it were possible –
won’t affect area pump prices.
Still, 60 drilling permits were submitted in Illinois in April, up from 22 in March.
The total number of permits issued so far
this year is lower than the same time period in 2010.
Citing the seasonal spike, David Morse, senior geologist at geological survey, said that it is difficult to pinpoint how much of the increase is being caused by the rise in gas prices.
The average global price for a barrel of crude oil climbed from $96.25 to $110.83 from Feb. 11 to March 25, according to the U.S. Energy Information Administration. Prices at gas pumps in Chicago followed this trend, with many charging more than $4 per gallon.
Illinois, a state not known for oil drilling, has about 650 oil fields, most of which are in the southern half of the state, according to geological survey. The most heavily drilled counties are White, Wayne and Clay, all in the southwest region of Illinois.
Christopher Steiner, author of the book “$20 Per Gallon," said that a great deal of domestic drilling today is a part of a rapid upturn resulting from a steep rise in gas prices in 2002, after decades of low prices. Steiner said shorter-term price trends have similar influences.
He also said that domestic drilling is not likely to help keep prices down.
“The ‘drill, baby, drill,’ crowd is delusional,” Steiner said. “Unless you own the oil in the ground, it has no effect on your life.”
According to Richards, Illinois produces 35,000 barrels of oil each day. This is less than one-tenth of one percent of global oil production, which, according to the CIA World Factbook, is around 84.81 million barrels per day.
“If you’re a mom driving a minivan in Schaumburg, an increase in domestic drilling is meaningless,” Steiner said.
The instant reaction to higher prices, Steiner said, is always to ramp up drilling efforts. But, he added, perpetually climbing prices also create incentives for other energy sources.
So the conflicts overseas, which are credited with causing the oil price increase, Steiner said, may also cause some reduction in oil dependence.