Old Wells Rouse Dormant Tennessee Oil Industry

The fifth of an occasional series called "The Money Map," which looks at how global economic forces are shaping the economies of America's hometowns.

Ky-Tenn Oil Inc. has stumbled into a new revenue stream: old oil wells.

The company drills on some 50,000 acres in southeastern Tennessee, and Ky-Tenn owner Bill Goodwin has been combing back through low-producing wells to eke out the last 150 barrels or so.

"The theory is if we drill a little bit deeper, more oil will roll into the well bore and we'll get more oil out of them. When oil was $10 a barrel we knew we could do that, but why spend the money and time? Now it's worth doing," Goodwin says.

WPLN reporter Blake Farmer tells Renee Montagne that if the company could sell the oil, it would bring in an extra $500,000 this year.

But the Tennessee oil infrastructure is near collapse after years of record low production. The closest oil refinery to Ky-Tenn went out of business last year, forcing the company to incur higher transportation costs. Most of the extra production the company has pulled out of the ground is just sitting in storage tanks.

However, Chuck Murchison, Ky-Tenn's chief of operations, isn't worried. He's confident that the infrastructure will develop as long as Ky-Tenn can continue to provide the oil.

Murchison concedes that Tennessee produces only a tiny fraction of oil that Texas does, but he strongly believes in energy independence.

Blake Farmer reports for Nashville Public Radio.

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