Thomko Petro Chemical Blog

SELMA, Ind. — An Indiana man is capitalizing on high crude oil prices with his own oil well - in his back yard!

It comes from the Trenton oil field that fuelled growth in east-central Indiana more than a century ago. It costs about $100,000 to drill an oil well, but that at today's prices, it's worth it.

Losh expects to drill four more wells on his property in the town of Selma, northeast of Indianapolis. He says the oil is stored in a tank and transported to Ohio for sale. The well also produces natural gas to heat his home and several others.

This all began when he began drilling on his ten acre property for natural gas to heat his home and found it. "Let's see if we can drill for oil. If there's gas here, there's got to be oil here," Losh said. "So, we drilled 300 feet deeper to see if we hit oil."

A camera (pics at links below) shows where Losh and his fellow investors found oil, almost 1,300 feet below the surface. While he won't say how many barrels his well pumps each day, the $100,000 start-up cost will pay for itself in one year. The oil is pumped twice a day for 30 minutes into a tank, then it's sold.

Losh says his group of investors will drill four more wells nearby, confident that one of the nation's biggest oil fields in the late 1800's still has plenty of black gold. While he concedes that he's making money, he says there's another incentive for drilling at home.

"It's mainly that we don't have to depend on foreign oil. There's oil here, let's see if we can get it again," he said. "It's time to get our homegrown oil back to Indiana."

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Why you could soon be paying Wall Street investors, Australian bankers, and Spanish builders for the privilege of driving on American roads.

In 1956, President Eisenhower signed the Federal-Aid Highway Act, which called for the federal and state governments to build 41,000 miles of high-quality roads across the nation, over rivers and gorges, swamps and deserts, over and through vast mountain ranges, in what would later be called the "greatest public works project in human history."

So vital to the public interest did Eisenhower, an old-style fiscal conservative, consider the interstate highway system, he even authorized the federal government to assume 90% of the massive cost.

Fifty years to the day after Ike put his pen to the Highway Act, another Republican signed off on another historic highway project.

On June 29, 2006, Mitch Daniels, the former Bush administration official turned governor of Indiana, was greeted with a round of applause as he stepped into a conference room packed with reporters and state lawmakers.

The last of eight wire transfers had landed in the state's account, making it official: Indiana had received $3.8 billion from a foreign consortium made up of the Spanish construction firm Cintra and the Macquarie Infrastructure Group (mig) of Australia, and in exchange the state would hand over operation of the 157-mile Indiana Toll Road for the next 75 years.

The privatization model has the full backing of the Bush administration. Tyler Duvall, the U.S. Department of Transportation's assistant secretary for transportation policy, says dot has raised the idea with "almost every state" government and is working on sample legislation that states can use for such projects.

"This is a ground battle in the United States right now," he says. "States just need to be convinced that this is basically something they should be considering."

Read the full article at Mother Jones

Many people here in Indiana question the governor's policy of selling our roads to foreign interests, and not keeping promises made in his campaign. What many forget is the governor's role in the Iraq War . . . CT

Mitch Daniels was the director of the Office of Management and Budget from January 2001 through June of 2003.

In this capacity, he was responsible for releasing the initial budget estimates for the Iraq War which he pegged at $50 to $60 billion. The estimated cost of the war, including the full economic ramifications, is approaching $1 trillion. [MSNBC, 3/17/06]

Where He Is Now: In 2004, Daniels was elected Governor of Indiana.

Key Daniels Quote:

Mitch Daniels had said the war would be an “affordable endeavor” and rejected an estimate by the chief White House economic adviser that the war would cost between $100 billion and $200 billion as “very, very high.” - Christian Science Monitor, 1/10/06

US Senate Foreign Relations Committee Chairman Richard Lugar Friday called on Congress to approve an agreement between the US and India providing the southeast Asian country with nuclear fuel, technology and reactors.

"We should be concerned about the precedent set by this action, and we must ensure that this agreement does not undercut our own responsibilities under the Nuclear Nonproliferation Treaty.

But I believe that we can do that satisfactorily," Lugar said in remarks prepared for a commencement address at the Naval War College in Newport, Rhode Island.

While Lugar is a leading proponent of nuclear nonproliferation in Congress, he had not taken a position on the India agreement until Friday, an aide said. The agreement is pending before his committee.

"Both houses of Congress are working through language that would guide our policy toward India," Lugar said.

"I believe we can help solidify New Delhi's commitments to implement strong export controls, separate civilian nuclear infrastructure from its weapons program, and place civilian facilities
under International Atomic Energy Agency safeguards."

The Indiana Republican said the agreement, which President Bush and Indian Prime Minister Manmohan Singh signed in March, would be "a powerful incentive" for India to cooperate closely with the US to stop proliferation of nuclear materials.

 An update to our posting of 3/16 - Gulf Petroleum Strikes Oil

Gulf Petroleum Exchange, Inc. has announced that the Cypress Formation in the Sterett Miles #1A was Hydro-Fraced Wednesday (3/22/06), and put into production late Saturday evening.

From Saturday evening until Monday morning (about 36 hours) the well produced about 75 barrels of oil and a considerable amount of the Hydro-Fracing fluid.

Gulf expects this well to continue producing in the range of 50-60 barrels per day. The Cypress Formation is located in the Illinois Basin.

The Illinois Basin has produced over 3.2 billion barrels of oil and recent calculations indicate that remaining recoverable reserves in the Basin may be as much as 4.1 billion barrels.

Thus, large quantities of oil, potentially recoverable using current technology, remain in the Illinois Basin oil fields.

Way To Go Drew!

Drew Ahner helped make a biodiesel fuel that won him first place in the regional science fair and will help his parents save money running the family farm.

The Forest Hill Elementary fourth-grader won the Central Indiana Regional Science Fair March 21 at the University of Indianapolis for his project, Biodiesel: An Economical, Environmentally Friendly Solution for High Fuel Costs.

In December, Drew's father suggested the family use biodiesel fuel instead of diesel for their tractor. Andy Ahner said his son jumped on the Internet and found Web site after Web site detailing how to make the fuel.

Drew made the fuel but his father, a process engineer at Diversified Systems in Indianapolis, supervised. Andy Ahner said materials used in the process are dangerous, so his main focus was to make sure his son wasn't working too fast.

"He knows this stuff and he has phenomenal recall when it comes to reading technical information, being able to recite what is needed and being able to apply it," Andy Ahner said of his son.

The two used vegetable oil from area restaurants, and through a three-week chemical process made biodiesel fuel. While they made a small amount for the science fair, they plan to build a facility this summer to make 200 gallons a week. It costs 63 cents a gallon to make, excluding electricity.

Source: The Noblesville Ledger 

Indiana may soon become one of the world's leading producers of bio-fuels, and LaPorte will be at the forefront of an environmental movement that officials hope will take advantage of those fuels.

According to the National Bio-Diesel Board, the fuel is biodegradable, non-toxic and essentially free of sulfur and aromatics.

The move will not likely cost the city much, despite the fact the fuel is currently three to four cents more per gallon than regular diesel fuel.

Carl Lisek, an environmental consultant who worked with the city to make the transition, said the vehicles won't have to be retro-fitted to accept the new fuel, greatly reducing cost. He also said gradual rises in production will eventually drive down the cost of the fuel.

With three bio-fuel plants, Indiana will be the world leader (in production)” Lisek said. “We've announced this today; we should start using it by Monday.”

The state also is ratcheting up production of another bio-fuel - corn-based Ethanol - at a plant near South Bend. Plans are in the works for what is said to be the world's largest ethanol production plant, which will be built in Kosciusko County.

One of our young readers posed this question. Even though we hear certain industry terms everyday, many are not quite sure what they mean.

WHAT IS ETHANOL?

Ethanol is alcohol made from grain, usually soybeans and corn in the United States. It's used in alcoholic beverages and is blended with gasoline as fuel for cars and trucks.

Nine new biodiesel, ethanol plants to sprout in Indiana

Charles Whittington is pumping $6 million into a new biodiesel plant in Morristown east of Indianapolis and has yet to sell his first gallon of the alternative fuel.

Gulf Petroleum Exchange, Inc. has struck oil in the Cypress Formation, the first of the three formations encountered in the Sterett Miles #1A located in the Illinois Basin.

The Illinois Basin, which extends from central western Indiana through southern Illinois into western Kentucky, is historically a prolific oil and gas producing area.

Over 3.2 billion barrels of oil have been produced and recent calculations indicate that remaining recoverable resources in the Illinois Basin may be as much as 4.1 billion barrels.

Thus, large quantities of oil, potentially recoverable using current technology, remain in the Illinois Basin oil fields.

The Sterett Miles #1A represents the first of five wells that Gulf will drill with Smith Oil Company who holds the leases for 3,000 contiguous acres in the Illinois Basin.

Construction of the world's largest biodiesel plant in Claypool, Indiana is great economic development news for Northern Indiana. More important, the new biodiesel plant will mean progress toward Indiana's goal of becoming a major player in the development and production of renewable energy.

In just one year, Indiana has grown from one alternative fuels plant to nine, with more to come. Two other biodiesel and six ethanol plants are currently under construction.

Gov. Mitch Daniels made the announcement of the $135 million plant owned by Louis Dreyfus Corp, while in Washington representing Indiana at a renewable energy summit.

Soybeans are the most common raw material used to manufacture biodiesel, and Indiana is third in the nation in soybean production, and the fifth in the nation in corn. It's interesting that only recently have Indiana's leaders and farmers joined forces to make biofuel production a priority.

After the new proposed facilities are up and running, the state will produce 400 million gallons of ethanol annually, and 95 million gallons of biodiesel. Eventually the state's goal is to produce a combined 1 billion gallons of ethanol and biodiesel fuel on an annual basis.  

There are now about 60 gas stations in Indiana that sell biodiesel, making it more easily accessible to consumers than in the past.

The state of Indiana has an opportunity to become a leader in the alternative fuel industry. Both the new proposed plant, soybean production, and finally some common-sense legislation can bring the state closer to this goal. 

While the current debate rages on as to whether a foreign government should operate U.S. Ports, there is another move going on across the country.

State governments across the U.S. are looking to privatize toll roads, airports, and who knows what else.  

If Indiana's Republican Governor Mitch Daniels gets his way, the Indiana Toll Roads will be privatized by a foreign company. Four of the companies are based in Spain, one in China, one in France, one in Italy, and two from Australia.

Here are the foreign companies that will soon control many of the the U.S. roadways . . .

Company has management authority over 16 toll roads accounting for nearly 1,000 miles of roadway in at least six countries. A subsidiary (Cintra-Macquarie) already operates the Chicago Skyway under a 99 year lease with the city of Chicago. In 2004, the eight mile Skyway was the first existing toll road privatized in the United States Indiana. CINTRA appears to be among the leading bidders for the potential lease of the Indiana Toll Road.

Macquarie Infrastructure Group
Private Australian developer and owner of toll roads, Macquarie has joint interest, along with CINTRA (See  CINTRA above), in the consortium that controls the lease to the Chicago Skyway. In total, it has interests in more than 900 miles of toll roads used by 1 million drivers on an average workday.

Fomento De Construcciones & Contratas SA
Fomento is engaged mainly in the construction and services business in Spain, but the company also provides solid waste collection and disposal, street cleaning, water supply maintenance, cement manufacturing and real estate development. Fomento already has a foothold in the American business scene as well. The company's cement factories are located on the U.S. east coast.

Sacyr Vallehermoso SA
The company owns about 1.4 million square meters of space in office, industrial and residential buildings and provides construction services under the name Somague in Brazil and Portugal.

Abertis Infraestructuras SA
In addition to its Spanish interests, Abertis controls highways in Argentina, Chile, Columbia, Italy, Portugal, Puerto Rico and the United Kingdom. And in December, the French government announced plans to sell its stakes in three toll-road companies to three private investors, including Abertis, to raise about $17.7 billion to cut national debt.

Autostrade SpA (Austostrade Group)
Italy-based Autostrade Group is the largest concessionaire in Europe for constructing and managing toll roads. In the U.S., Autostrade International of Virginia O&M is involved in managing the Dulles Greenway, a 14-mile motorway in Virginia.

Cheung Kong Infrastructure Holdings LTD
Based in China, Cheung Kong develops, invests in and operates businesses pertaining to infrastructure management. But it also is involved in the manufacturing, sale and distribution of cement, asphalt production and in financing and investment-holding.

Autoroutes Du Sud De La France SA - ASF
Autoroutes specializes in constructing and maintaining motorways in France. The company also serves as a collection and processing service of traffic information and research. French government entities had controlled 51 percent of the company, but the government announced in 2005 it would sell 50 percent of the business worth about $6.96 billion.

Transurban Group
Australia-based Transurban develops and operates electronic toll roads under three subsidiaries. The key asset of the company is CityLink, a 13.7-mile toll road in Melbourne, Australia, and they are developing a 40-percent-owned toll road in Sydney.

Source: NWI Times

To identify the potential bidders, The Times relied on information from state and local transportation insiders as well as foreign media reports. To profile the likely bidders, The Times used information from a variety of international business profile services, including Global Duns Market Identifiers (Dun & Bradstreet Inc.), Worldscope-International Company Profiles and Market Guide Company Profiles.

China's increasing economic strength and energy consumption will inevitably decrease the supply of gasoline, Sen. Richard Lugar predicted in Louisville yesterday.

"Supply and demand is likely to drive the price right on up as long as I live and you live," said Lugar, R-Ind., chairman of the Senate Foreign Relations Committee.

He spoke to the Louisville World Affairs Council, an organization composed mainly of local business leaders, professionals and educators. The only option to ward off the trend of rising gas prices is to promote the development of alternatives.

Lugar spoke proudly of efforts in Indiana to promote the use of alternative fuels, including ethanol, which is derived from corn. In Terre Haute, Indiana consumers can buy E85, a fuel that is 85% ethanol. Lugar says the country could be doing much more to develop such fuels.

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