What started out nearly 80 years ago as a wonderful, marketable and lucrative surprise is ebbing away as one of Kansas's most natural treasurers.

The outlook for the Hugoton field and the many players both dependent upon it and profiting from it varies, according to which expert is talking.

Renowned engineer Lestor Wilkonson sees a day where natural gas will have to be imported to Kansas because there won't be any left to pump or sell or power or transport.

He says southwest Kansas is "at the tail end of Hugoton. There's going to come a time when the local use of gas will be a good, rather than trying to sell the gas."

For him, Kansans' natural gas needs should take precedence. 

"Local usage will be important, whether there'll be water to pump it is another matter," he said.

Notes John McCannon, assistant general counsel with the Kansas Corporation Commission, "The commission has never done any individual reserve well studies. The KCC sets market demand for each field. We (KCC) have a pretty good idea how much gas is left. However, they are estimates. I'm not sure if individual wells (gas amounts) would be helpful."

McCannon called this year's lowered gas levels in Hugoton "not a conservation process. The market process is parceling out of the individual well."

"It's (Hugoton) lower this year because the field is another year older," he said. "The wells have gone down. The wells can produce less gas than they could a year ago. Most of it's due to pressure decline, which is a natural occurrence with less gas."

He called the Pamona-Council Grove field "the only place in the state where we even have any margin left."

Regarding all natural gas fields in southwest Kansas, he said, "In those particular fields, the players have pretty much stayed the same. Their percentages have stayed the same."

McCannon said original estimates of the natural gas supply in the Hugoton Field were pegged at 30 to 35 trillion cubic feet and thus far, about 25 trillion cubic feet have been removed from the field.

"There's somewhere between 5 to 10 trillion cubic feet left," he said.

Scientific projections aside, what is known is the handful of major multinational energy companies left have taken advantage of technology to speed up the gas extraction process with compression equipment, along with infill drilling that allowed more than one well to be drilled in a designated gas section that already had one well.

And for these various endeavors, both tax exemptions and tax deductions are possible for the operating companies.

"The move to infill drilling allowed increased production," said Alan Roop, Finney County appraiser. "There's a reason for infill drilling. There was a lot of heavy lobbying, pressures for more drilling to get results. The major companies took advantage of infill drilling. The larger companies have done most of the infill drilling."

According to figures provided by the appraiser's office, the county's major gas operators have at least half of their wells here designated as infill ones.

Of BP Amoco's 269 wells, 122 are infill. Mobil has 177 wells, 81 are infill, while 63 of OXY USA's 135 wells are infill ones. And finally, 63 of Union Pacific's 129 wells are infill.

Roop said wellhead prices, the amount paid by pipeline operators as the gas comes out of the well, "bother" him. 

"There's a lot of gas kept in the ground, areas with great big caverns where gas is kept until the price is right, that's my assumption," he said.

Ironically, infill drilling did bring more tax revenues to Finney County. 

"If you allow infill drilling, there's more value we got to tax. All of the gas wells, regardless of their location, are taxed at the same rate.

"How long will Hugoton last? One of the questions is with more and more compression units, they're getting closer to the end. It's anyone's guess."

How the laws of supply and demand will affect those diminishing supplies remains to be seen.

Dick Brewster, director of BP Amoco's government affairs and lobbyist, observed earlier this year his corporation, starting from its early antecedents as Standard Oil, have been "pumping for one-and-a-half centuries."

And that involvement in Hugoton has expanded. 

"The number of wells drilled is going up dramatically," he said. "We're one of the largest producers of natural gas wells in southwest Kansas. There is drilling activity in southwest Kansas. Demand relative to supply has gone up. Natural gas is a commodity, it's traded on the market."

The relationship between natural gas and the area's agricultural enterprises is not lost on Brewster. 

"I know the economy of southwest Kansas is largely dependent on natural gas for powering irrigation pump engines," he said. "Historically, natural gas was the most economic fuel for those people to pump water ... The overwhelming majority combination of available water and natural gas has really bolstered the economy out there for years."

Nearly 50 years ago, C.H. Hinton, an employee with the Panhandle Pipe Line Co. in Liberal who appeared frequently before the Kansas Corporation Commission, wrote, "There have been only short intervals during the past 20 years when I have not had constant problems with the Hugoton Field."

Even back then, how natural gas waste was defined and in whose interests those definitions prevailed was problematic. In his "The Story of the Hugoton Natural Gas Field," Hinton distinguished between natural gas's physical waste and economic waste.

"Economic waste is the difference between the net heat energy input and the net heat energy realized which can be utilized for the economy of the country," he said. "When the demand for natural gas was low, the value was low. When the value was low, the operator could not afford to take great pains and expense to operate in a manner that would cause the least waste."

Hinton built a case for gas conservation.

"I am firmly convinced that the word conservation also applies to the preservation of the presently proven research by augmenting with additional discoveries."

In February, the Kansas Geological Survey issued results of 2000 natural gas production levels. 

"Kansas has historically produced more energy than the state consumes," according to a release. "The value of natural gas produced in 2000 was about $2.05 billion."

And like Wilkonson, the state's geological researchers also see a time coming when Kansas will have to import its energy, rather than export it. 

"While there is still more natural gas produced than consumed in Kansas, other energy fuels, like coal, are arriving at larger rates due to increased electricity needs."

"...the state now consumes just about as much energy as it produces ... As a result, instead of exporting energy, as the state did in the past, Kansas now faces the possibility of becoming an energy importer," according to the release.

Kansas will not be alone with expected natural gas imports over the ensuing decades. According to a report, "International Energy Outlook 2001," the United States will increasingly become an importer of natural gas, rather than an exporter or have enough domestic natural gas for domestic use.

Geopolitical gas issues

By the year 2020, imported natural gas is expected to make up nearly 17 percent of the nation's gas use. 

Russia has surpassed America in both natural gas production and in reserves. While the Hugoton Field once stood as the undisputed leader for North America in natural gas resources, its dwindling reserves are now overshadowed by other countries.

In 1999, Russia contributed 23.7 percent of the world's natural gas, as compared to the United States' level of 23.2 percent. Yet, a total of 38.7 percent of the world's natural gas reserves are now located in Russia, according to energy forecasters. 

In fact, the energy report uses a gas reserves-to-production formula that forecasts 100 years worth of gas for the Middle East, 98 years for Africa and "only about 10 years for North America."

As Hugoton's gas is pumped away, "Natural gas is expected to be the fastest growing component of world energy consumption ... the world share of gas for electricity generation is expected to rise to 26 percent in 2020," according to the report. 

North America's gas reserves only accounted for 5 percent of the world's total reserves at the end of 1999, but out of those reserves was pumped 31.8 percent of the world's total production that year, according to the energy report.

Also forecast for Americans using natural gas, "Consumers have seen and will most likely continue to see, substantial increases in natural gas costs."

Meanwhile, multinational gas companies are becoming increasingly involved in natural gas ventures elsewhere in the world, as their Hugoton Field activities continue, but with an expected end in sight.

Companies such as Exxon/Mobil, BPAmoco, Texaco and Anadarko are visible participants in the Western Hemisphere Oil and Gas Environmental Forum, a group that has been meeting regularly for several years as a "... cooperative effort between the private and state-owned oil and gas companies in the United States and Latin America," according to the U.S. Department of Energy website. 

The federal department has been an active supporter of such activities since the mid-1990s.

The forum is chartacterized as providing a learning environment while, "The North American companies are familiarizing themselves with the new operating environment as they enter into production and production-sharing agreements with their Latin American counterparts." 

Meanwhile Mobil, now Exxon/Mobil, is involved in a joint venture in Nigeria's Oso Field. Nigeria has the world's 10th largest reserves in natural gas.

Various companies and U.S. energy officials are involved in cross-border initiatives, ways to develop increased importing of natural gas to the United States from Mexico and Canada.

Four years ago, state geologists warned: "Kansans should be aware that oil and gas resources of the state require continuous stewardship. Just as we manage our valuable ground water resources, we must protect and manage the Hugoton natural gas area."