by Timothy R. Carr, Kansas Geological Survey, KU Energy
Research Center
and Scott W. White, Kansas Geological Survey, KU Energy Research
Center
Executive Summary
This report will examine the history, current status,
and future of energy in Kansas. Total energy consumption continues
to grow in Kansas. However, Kansas is more energy efficient than
20 years ago. In 1998, 70% less energy was required per dollar
of gross state product than it was in 1977. Growth in total energy
consumption slowed after 1980, while the State's economy has
continued its rapid growth. Kansas and the U.S. are rapidly changing
how energy is delivered as we move to increased dependence on
electricity. Over the last 40 years, electricity's share of Kansas
energy consumption has doubled from 15% to nearly 33%. With the
restructuring of the electric industry and increasing uncertain
environmental requirements, today's additions to baseload electric
generation capacity are overwhelmingly combined-cycle or combustion
turbine technology fueled by natural gas. This has resulted in
an extremely rapid and accelerating growth in demand for natural
gas for electric generation.
Natural gas and petroleum remain the most important energy
resources in Kansas, accounting for nearly all primary energy
produced in the state. Energy production in Kansas peaked in
1967 at 1573 trillion BTU's. In 1999, primary energy production
had declined to approximately 912 trillion BTU's. Natural gas
production peaked in 1970 at 900 billion cubic feet (bcf). Petroleum
production peaked in 1956 at 124 million barrels (bbls). Of the
U.S. states, Kansas is ranked 7th in natural gas production and
8th in oil production. In 2000, hydrocarbon production responding
to increased wellhead prices is estimated to have increased slightly
from 1999 to over 34.3 million barrels of oil and 550 billion
cubic feet of gas. The current year wellhead value of hydrocarbon
production will increase over $1.4 billion from 1999 to an estimated
wellhead value of $3.046 billion. The increased wellhead value
of oil and gas production will have a positive impact on the
Kansas economy and state and local tax revenues, and should be
felt across the gas and oil producing counties of southeast,
central, and western Kansas. However, this positive impact will
be balanced by potentially serious effect of increased energy
costs and potential spot shortages on the Kansas agricultural,
chemicals industry, and general consumer economy. Shortages and
price spikes are possible in natural gas and to a lesser extent
in petroleum distillate products.
Energy is increasingly a national and global market dominated
by high technology, high capital requirements and large integrated
companies. Small and mid-sized companies, which must continue
to innovate in order to compete, dominate the Kansas energy system.
To meet the rapid changes in energy demand, Kansas must work
to increase energy supply to prevent shortages and maintain reasonable
costs. Kansas and U. S energy supply will continue to be dominated
by fossil fuels. However, an economic and measured approach that
integrates new energy sources (e.g., wind and ethanol production
from agricultural production) into the Kansas energy system can
have a positive impact. Increased synergy and efficiencies are
possible among all the various aspects of the Kansas energy system.
In the short-term, Kansas and the U.S. are facing another
hydra-like energy crisis that seems to grow new heads every day.
With high prices and tight supplies of natural gas and distillates,
we are facing a "Winter of Discontent." In the past,
similar short-term energy situations have resulted in changes
of energy policy that did little to alleviate the fundamental
problems of supply and demand.
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