News From Terre Haute, Indiana

Local & Bistate

December 19, 2013

30 feet at a time

Bits bite dirt, as work starts on well near east edge of ISU campus

TERRE HAUTE — Black smoke from a roaring engine the size of a minivan signaled another adjustment to the massive drill. Three workers wearing hard hats, mud-covered boots and coveralls struggled with the heavy steel equipment, intently focused on their demanding work.

They had just attached a heavy tungsten carbide drill bit, a little larger than a football and the color of gold, onto the end of a long hollow metal pipe. The pipe stretched 30 feet above their heads into a towering oil derrick that reached much higher still.

Oil company executives, staff of Indiana State University and others watched on Wednesday as the workers eventually got the drilling equipment ready to go. It was cold, about 35 degrees, and breezy, as the drill bit finally made its way beneath the platform toward the ground about 15 feel below.

The pipe seemed to glide effortlessly down, making it seem as if the drill bit were moving through nothing more substantial than water. The bit, weighing more than 100 pounds and costing up to $40,000, is capable of slicing through earth and rock and coming back to the surface in like-new condition, said Don Jones Jr., president and founder of Pioneer Oil Co., the company behind the effort.

Wednesday was a special day for Jones, a fourth-generation oil man. He recalls being about 18 and helping plug a leaky and long-unused oil well on the site of what would later become Hulman Center. It was grimy relic of Terre Haute’s turn-of-the-century (the 20th) oil boom.

That day, many years ago, “I saw the oil,” Jones said in his Midwestern drawl. “It’s good, commercial-grade oil.”

So, Pioneer knows there is oil down there, he said. “We just don’t know how much.”

Pioneer Oil, an Illinois-based company, is doing something no one has done in more than a century: Drilling for oil below downtown Terre Haute. The city, Pioneer believes, still sits atop a reservoir of oil, similar to what was discovered about 1889, when a gusher at about Ninth and Eagle streets launched the city’s “oil craze.” The last successful well downtown stopped producing in the 1920s.

According to Indiana Department of Natural Resources records, there have been more than dozen oil wells in Terre Haute between Wabash Avenue and Spruce Street and between Seventh Street and 13th Street, an area including – among other things – Hulman Center, the Cherry Street Parking garage and Clabber Girl.

Pioneer conducted seismic testing downtown a year ago to identify the outlines of the suspected oil pool. ISU is providing the property for the oil derrick around 10th and Chestnut streets, north of Chestnut.

ISU is also, no doubt, the largest property owner that will benefit financially if the well is successful. However, more than 11 other downtown property owners, including some churches and not-for-profits, have signed oil royalty leases, which entitle them a share of any oil sales.

The drilling site could hardly be more out-of-the-way and still be within the “downtown.” It is between Chestnut and Spruce streets on a triangular piece of land outlined on two sides by railroad tracks. On the west is “Tom Brown Boulevard,” also called North 10th Street. To the east is a diagonal street, North 101⁄2 Street. It is an area zoned for industrial manufacturing with special permission – granted in September by the Terre Haute Board of Zoning Appeals – for oil exploration.

The drilling site is small by industry standards, but covers a few acres. Trailers are parked around the edges, and large machines and equipment fill much of the rest of the space. Long pipes to drill into the earth lie next to the derrick for future use.

A small trailer serves as an office, although it contains little more than a table and chairs. On Wednesday, an inspector from the Indiana Department of Natural Resources was at the site talking with Jones and Steve Miller, chief financial officer for Pioneer. DNR inspectors always come to drilling sites when they are starting operations, Jones explained.

Pioneer will be drilling down about 1,600 feet, Jones said. The drill will then turn and gradually move horizontally under the earth. The turn will be south, toward downtown, he said.

Inside the drilling site, which is surrounded by vinyl privacy fencing, are storage tanks for oil. There are also large tanks designed to capture gases and odors from the well.

The well has been secured to avoid “blow outs,” which are explosions of natural gas such that killed workers and polluted the Gulf of Mexico in 2010, Jones said. The drilling business can be dangerous, but if you do everything correctly, it doesn’t have to be, he said.

It will be about a month or more before Pioneer knows whether this effort will pay off. Until then, the operation will be going round the clock. Drilling will even be taking place on Christmas Day, Jones said.

“We don’t usually do that,” he noted. “But we’re not usually in a place like this.”

If oil is produced from the well, tanker trucks will be coming and going from the site, Jones said.

Would that be as often as daily? he was asked. “We hope so,” he answered.

Reporter Arthur Foulkes can be reached at 812-231-4232 or arthur.foulkes@trib

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