Illinois Oil: A Little-Known Land of Lincoln Staple

Nearly four billion barrels of oil have been produced in Illinois since commercial production began way back in 1905.

Pump jacks are as common – albeit spread out – in southeastern Illinois as skyscrapers are to Chicago. Still, millions of Illinoisans have no idea there are oil wells in the state. And many of those who are aware of Illinois’ storied oil production history may not know key facts about the present-day industry that distinguish it from the “Big Oil” stereotype that is so prevalent today.

Over the decades, Illinois has risen to the status of being the country’s third-largest oil producing state on two occasions (1907-1912 and 1940). The state’s production even outpaced Iran and Iraq’s combined production in 1940, and Illinois oil production literally helped fuel the Allied Forces defeat of the Axis Powers in World War II.

For decades, publicly traded giants like ExxonMobil and Texaco dominated production in the Land of Lincoln. Fast forward to today, and those “Big Oil” companies are all gone, but Illinois oil production remains vital to hundreds of downstate families and dozens of Southern Illinois communities. More than 1,000 small, independent companies continue to produce between 7-8 million barrels of oil annually in rural areas far south of Chicago. A vast majority of these companies are family-owned and based in the same small communities where they produce.

Similar to Illinois farms – 96 percent of which are family-owned – typical Illinois oil producers are mom-and-pop companies. In fact, many Illinois oil producers are farmers as well. For example, family-owned Campbell Energy in Carmi is not only Illinois’ largest oil producer, it has also been one of the state’s more prominent family-owned farms for decades.

The average daily production of the Illinois oil production companies today ranges between 12 and 13 barrels per day, dwarfed by the state controlled Saudi Aramcos and Rosnefts of the world. But although Illinois petroleum producers are anything but “Big Oil,” they have a huge economic impact in the state.

Illinois oil production generated half a billion dollars in gross receipts last year, including $70 million in royalty income for mineral owners. The industry directly employs roughly 4,000 directly and supports another 10,000 jobs indirectly. Illinois oil producers also pay an average $700 million annually in state, federal and local property taxes, the latter of which help fund public schools near production. When the state’s four refineries and the Patoka tank farm – the second-largest bulk storage facility in the United States – are added in the mix, Illinois remains a low-key petroleum industry powerhouse, employing more than 20,000 residents with well-paying jobs while generating more than $23 billion in gross regional product.

In a world demanding more and more oil even as those who produce it are demonized or taken for granted, Illinois oil producers remain remarkably resilient and off the radar – even in their own state.

But as significant as Illinois’ oil past and present are, the future remains brighter than most realize.

It is estimated that nearly four billion barrels of oil remain in the Illinois Basin, oil that can be accessed with deeper drilling or new technologies like horizontal drilling and hydraulic fracturing of the New Albany Shale and enhanced oil recovery using liquified carbon dioxide sequestration.

Oil remains essential, not only to Illinois, which consumes more than a half million barrels per day, but the world as a whole. We will continue to rely on petroleum for decades, not only for transportation fuels that move the products that make our modern lives possible around the world, but more than 6,000 petroleum-based products.

With 90 percent of the state’s oil production occurring where just two percent of the Land of Lincoln’s residents reside, Illinois oil producers are largely out of sight and out of mind. But they remain an integral component of the Land of Lincoln’s past, present and future.