RENEE MONTAGNE, HOST:
The price of oil has been dropping, as you probably noticed. It fell all through the summer and then took a dramatic plunge this month. Good news for those of us filling up gas tanks, not such great news for oil producers and David Kestenbaum with our Planet Money team talked with one oil producer you don't usually hear from.
DAVID KESTENBAUM, BYLINE: Jason Bruns lives in a state that's not exactly known for oil - Kansas. I reached him by phone at his office. The connection was not very good.
JASON BRUNS: I'm out on Oil Field Road and they never have had great phone lines out here.
KESTENBAUM: It's called Oil Field Road?
BRUNS: Yeah. Yeah.
KESTENBAUM: How many oil wells do you own?
BRUNS: Oh, let's see. Two, four, six - 10?
KESTENBAUM: The first one he got from his grandpa. It's called the Markley, probably after the farmer who originally owned the land. They all have names like that - the Horsch, the McCutchen, the Hackler. They look like those oil wells you've probably seen in old photos; a giant seesaw going up and down. Some of them are over 50 years old now. They're not gushers, not anymore. Take that one his grandpa gave him.
BRUNS: Just about two barrels a day.
KESTENBAUM: Two barrels a day.
KESTENBAUM: Just to compare, like, Saudi Arabia gets 10 million barrels a day.
BRUNS: Right, right.
KESTENBAUM: So you're smaller?
BRUNS: A little bit smaller, I'd say. (Laughter).
KESTENBAUM: Think a kitchen faucet that's barely turned on, about a teacup of oil a minute. These wells are called stripper wells and there are hundreds of thousands of them in the United States. Old wells long past their initial rush, but still producing.
BRUNS: Wells in Kansas that only make a barrel or half a barrel a day, some of them.
KESTENBAUM: Some stripper wells are owned by good-sized companies and some by people like Jason. The drop in oil price has not been easy for him. If you're Saudi Arabia and the price of oil goes down, you've got options. You can decide to pump less to try to push the price of oil up. Jason can't do that. The global oil market doesn't care if he takes one of his two-barrel-a-day wells off-line. Jason is what economists call a price taker not a price maker. He could decide to store the oil and hold it until the price of oil goes up again. Some larger producers do that, but Jason says that doesn't really make sense for him. The oil comes out of the ground, goes into this small tank and when it's full some guy in a truck picks it up. Besides, he needs the money. After maintenance and expenses the wells altogether, they've been earning him $3,000 to $4,000 a month.
BRUNS: That's what feeds my family. That's my job. That's what I do. We produce oil.
KESTENBAUM: If you're on Jason's side of the oil market, it's like everything's backwards. He's seeing everything from the other side. His neighbors stop at the gas station, fill up their cars and they're happy that the price of gas has dropped. Sometimes they bring it up at church.
BRUNS: I've had people thank the Lord that the price of gas is going down and the pastor always looks at me and kind of grins because he knows what I'm thinking (laughter) but, hey you know, we love them and God love them and we'll see what the price does.
KESTENBAUM: For Jason, that sign at the gas station showing the price for a gallon - that number is a reminder that his livelihood is dependent on huge global forces; demand for oil in Europe and China, the decisions of sheikhs in the Middle East. So when he fills up his tank and the price has dropped below $3 a gallon, he gets an uneasy feeling.
BRUNS: I usually know before it's going to drop because I know that oil's dropped, but how I feel is - I don't feel good about it. That's the answer to your question in short.
KESTENBAUM: Do you feel a little bit good because at least filling up your tank, it's going to cost you a little less?
BRUNS: Maybe a little. (Laughter). But I really had to search hard to find that little.
KESTENBAUM: After we talked, the price of oil dropped again.
David Kestenbaum, NPR News.
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