Fuel alternative found in Oklahoma

Thursday, September 11th 2008, 11:48 pm
By: News 9

By Dave Jordan, NEWS 9

HUGHES COUNTY, Okla. -- With fuel prices fluctuating on a daily basis, political leaders are scrambling to come up with viable alternative to foreign oil, and a long-term solution is right here in Oklahoma.

Devon Energy has pumped millions of dollars into Hughes County and one town is already seeing the result of this potential energy boom.

Tony and Sue Abney have lived in Hughes County their entire lives.

"We were very quiet, a little farming community, not a whole lot of traffic, or people from outside," said Sue Abney, who leased mineral rights.

But that has changed, thanks to natural gas exploration, which has the whole town talking.

"The tank trucks, the drilling and the pipelines, it's changed forever," Tony Abney said.

The change comes at a time when oil prices are near record highs and America is clamoring for a new energy source. Now Hughes County, Oklahoma sits ready to meet the need.

Since 2003, Devon Energy has quietly pumped hundreds of millions of dollars into natural gas exploration of the Woodford Shale. Part of the Woodford sits over the southern one-third of Hughes County.

The Abneys, like most residents, had no idea.

"We really didn't think, you know, well, nobody thought that there was anything in the area until they come up on a method to get this gas out of this shale," Tony Abney said.

Many residents are leasing the mineral rights off their land to Devon. It only took a few weeks to get this gas well online.

"It's been a great boom for the area," said Kathi Mask, the Hughes County Tax Assessor.

Just outside Mask's office in nearby Holdenville, researchers are poring through county records every day, trying to find other land owners who, like the Abneys, stand to make a profit.

But money for the lucky landowners doesn't just come from mineral rights.

"They're needing truck drivers. They're needing people here to operate on the drilling rigs and they's a lot of construction going on with the pipeline," Mask said.

With all the construction comes a higher tax base. Devon built a plant near the Woodford Shale operation, increasing the tax base from $9 million last year to $21 million in 2008 with taxes on the latter figure around $885,000.

"70 percent of that will go to the school district," Mask said.

Calvin Public School Superintendent John Tuck said some Calvin public schools sit squarely in the path of the Devon exploration.

"We're going to be in the bubble of $700,000 range local money, so we're getting up to the bubble of no state aid," Tuck said.

John has also noticed the socio-economic status of his students' parents is steadily increasing, but with that boom, there is cautious optimism.

"I think people are a little bit cynical in Oklahoma. They see the boom. They see the bust. They know eventually it goes up, it goes down," Tuck said.

That view isn't unwarranted based on the oil bust of the 80s, according to OCU business professor Ron Shaw. He said this time is different because natural gas is considered a clean and alternative fuel.

"Going forward in the future, I think a natural gas play is very smart compared with traditional oil," Shaw said.

Hughes County is already experiencing some growing pains. Traffic has more than doubled because of the construction and the roads need work.

But this, the Abneys said, is a small price compared to the big financial rewards they and other residents hope to reap.

"Overall, I think they're happy about what it brings to the community," Sue Abney said.

Devon has about 100,000 acres of leases and is operating about six drilling rigs within the Woodford. The company said it could produce more than 1-trillion cubic feet of natural gas from the area.