BusinessTN

Maryland Lt. Gov. Michael Steele coined the phrase "Drill, baby, drill" at last year's Republican National Convention in St. Paul, Minn. The phrase was quickly embraced by those in attendance (and across the country) who want increased drilling for domestic oil in the state of Alaska.

There are some in Tennessee who would like to see an elected lawmaker echo the same refrain about turf right here in Tennessee. They believe the Volunteer State could produce more domestic oil and gas, but that government regulations stand in the way. Given the state's current economic turmoil, high unemployment in rural counties and change of command at the state Capitol, a fresh look at the state's rules and regulations governing the industry may indeed be overdue.

Tennessee's oil and gas production is small by national standards. But according to Scott Gilbert, high crude oil and natural gas prices, new drilling technology and the state's Chattanooga Shale could combine to turn Tennessee into a significant oil- and gas-producing state, so long as enforcement of outdated regulations doesn't hamstring efforts. Gilbert, president of the Tennessee Oil & Gas Association, says the potential is there to produce oil and gas in more than half of the state's 95 counties. (Nine Tennessee counties produced gas in 2007, and 11 counties produced oil.)
Oil production in this state predates the famous Drake well in Pennsylvania of more than 150 years ago. The modern age of oil production in Tennessee, though, started around 1970, when a larger-than-usual oil field was discovered in Scott County. Upon its discovery, people in the industry poured in from all across the country. Aware that the state had no regulations in place at the time to govern the industry, Tennessee officials fast-tracked creation of the Oil and Gas Board, which quickly put into place regulations on drilling and gas and oil production. At the time, oil was less than $10 a barrel. Today, with oil prices of $140 a barrel a recent memory (and a likely future prospect), Gilbert and others are trying to convince the state to take a fresh look at some decades-old industry regulations in the hopes of stimulating greater oil and gas development in Tennessee.

What types of changes are being proposed? Using modern technology, "dry holes" that didn't produce an abundance of oil when first drilled decades ago have the potential today to become substantial oil or gas producers at rates hundred of times their current production levels. Taking a fresh look at regulation aimed at plugging old wells that are currently either not producing oil or gas, or not attached to expensive pipelines, would be a healthy exercise. Doing so might better balance the state's environmental needs (some old wells do leak) with the burgeoning needs of Tennessee's oil and gas industry. On the flip side, a comprehensive review of the industry's current regulations would help ensure adequate and sensible environmental regulations are in place to guide an industry now eager to expand.

Huntsville, Tenn.-based Miller Petroleum announced in October that its latest well had tested as potentially one of the best natural gas vertical wells the company had ever drilled. In 2008, the State Gazette in Dyersburg reported on the newfound possibility of oil production in the western part of the state. And Newsweek magazine, in a recent examination of how much oil exists in the United States, published a map showing excellent potential for oil production over a large portion of Middle and East Tennessee. In light of such promise and progress of domestic oil and gas production across the state, it's time for lawmakers to drill deeper in their efforts to understand and, if need be, to amend long-standing regulations that could be hampering the industry.