energy from the heartland
The Kansas oil and gas industry begins a new era on January 1, 2008, with the initiation of the Kansas Oil and Gas Resources Fund. The fund was created by the Kansas Petroleum Education and Marketing Act passed in 2006 and amended in 2007. The act created a non-governmental entity to collect and disseminate funds to increase the significance and viability of the Kansas oil and gas industry through education programs in Kansas schools. A second purpose is to create public information programs to improve the image and credibility of the oil and gas industry in our state.
The Kansas Oil and Gas Resources Board will be funded through a small, voluntary assessment on the working interest share of oil and gas leasehold interests. Royalty and overriding royalty interests are exempt from the assessment. The amount of the assessment is 0.05 per cent, or 0.0005, ($0.50 per $1,000) of the working interest revenue share.
The assessment may be collected by the first purchaser or the operator of an oil and gas lease, or may be billed to the working interest owners by the operator. The fee is voluntary in that each working interest owner will be able to seek a refund, with interest, from the Kansas Oil and Gas Resources Fund at the end of each calendar year. Assessments will begin to be collected with production starting in January, 2008.
Kansas becomes the fourth state in the nation to create a fund to address public information programs. Our fund is unique by creating a non-government organization managed by members of industry, insulating our fund from political whims in addressing the state’s budget from year to year. The annual budget has been designed to efficiently and consistently address its public information objectives.
The Kansas oil and gas industry is second only to the agricultural industry in the economic significance it has to the state’s economy. No other industry has created as many jobs in rural Kansas as the oil and gas industry in the past ten years. The taxes assessed against production is the lifeblood of many rural counties.
Our industry is also a good steward of the land it shares with agriculture. We contribute to a program that has addressed wells abandoned decades ago by companies that no longer exist.
A bias found in newspaper, television and radio against our industry fosters a public perception about the oil and gas industry that is incorrect. This bias forces us to defend ourselves against ill advised regulatory schemes and higher taxes and loss of incentives. All of which ignores a well managed industry that has evolved into a good stewards of the Kansas environment while providing an energy source vital to the everyday lives of its citizens.
Kansas producer groups have laid a foundation for improving public education through teacher training workshops across the state over the past ten years. Teachers come away from those workshops with information and materials that have been approved by the Kansas Board of Education that they can use in their classrooms. In addition, our industry has created public service announcements seen in television markets in northeast Kansas during the winter and spring that promote the importance of Kansas oil and gas to the state’s economy.
Through feedback from teachers and comments from legislators in Topeka, we have proven successful in bringing a balanced viewpoint to the negative image the industry endures. But, those efforts have been limited by a lack of consistent funding to create lasting campaigns. The Kansas Oil and Gas Resources Fund was created to overcome those limitations.
Your Kansas oil and gas industry has evolved since the first well was hand drilled in northeast Kansas to sell oil to wagons as a lubricant before crossing the prairies headed west. We have a long and proud history of activity in the state and believe that its role in the future remains bright. The Kansas Oil and Gas Resources Fund will allow us to tell our story to Kansas citizens, keeping them better informed about their energy choices in the future.