Adler Energy, LC (Spencer) Operations Supervisor John Johnson recently spoke to The Brazil Times about the pumping of oil on city property.
"There are a total of six oil wells in operation," Johnson said. "Four are on the property of Joseph C. Thomas Enterprises, while the other two are on the same property as the Brazil Wastewater Treatment Plant (6538 N. Murphy Road), and all are along Murphy Road."
Johnson added an average of approximately 100 barrels of oil are pumped from the wells each day, and the city shares a one-eighth royalty with Thomas Enterprises.
"The city gets a little less than Thomas because there is less acreage being utilized," he said. "Right now, we are currently pumping from 40 acres of city property and 80 acres on the Thomas property."
Once the oil is pumped, it is sold to Country Mark Cooperative, LLP, which is a broker, who then distributes the product.
"We have trucks come in four times a week and take out about 170 barrels worth of oil on each run," Johnson said. "This essentially takes the city and the Thomas' out of the liability and HazMat loop."
Brazil Water Office Manager Sheryl Hill told The Brazil Times the city made $52,768 off the oil royalties in 2010, all of which goes into the Sewer Fund.
"With the oil being pumped off of a utility property, it has to go into a fund for the utilities," Hill said.
Mayor Ann Bradshaw added, "The utility funds and the General Fund are financed separately. So funding that comes in from pumping the oil goes into the Sewer Fund and cannot be used on roads."
Johnson told The Brazil Times the city had originally allowed the lease of land to be used for the possible tapping of natural gas, but an anomaly led to the discovery of oil.
"Another company leased the surrounding areas to search for natural gas, but during seismic tests oil was found and we started drilling in about February 2008," he said. "Since then, we have had a steady production."
He added water that is brought up with the oil is separated out and pumped approximately two-and-a-half miles east of the property in order to help push the oil, which is a high-grade, back toward the wells.
"What is pumping here is one of the highest grade oils around," Johnson said. "It is graded at about a 41 gravity, which means there is not a lot of impurities."
According to the American Petroleum Institute, oils with a gravity between 40 and 45 are the highest grades, considered a "sweet light crude," and require no deduction adjustments in the price per barrel.
Johnson added he does not foresee a reduction in production in the near future.
"The field in Staunton is still producing and I don't really see this one drying up anytime soon either," he said.