Protecting landowners: New association strives to educate, protect mineral owners
Cheyenne – Across Wyoming, rising oil and gas prices have led to a renewed surge of Applications for Permit to Drill (APDs), particularly in the southeast corner of the state.
“The APD permitting process and regulations havecreated an incentivized monopoly in Wyoming, where the first person or company to get a permit – whether they are planning on leasing or drilling on that permit – can control an entire mineral spacing unit,” says Conner Nicklas of The Falen Law Offices, LLC. “There is an artificial race in Wyoming being run by large oil producers to gain a competitive advantage in producing oil and gas.”
He continues, “This race, which has been artificially created by the rules of the Wyoming Oil and Gas Conservation Commission, harms the land and mineral owners who get some of their mineral value expropriated by these companies.”
Large mineral spacing units – at 1,280 acres each – encourage “hoarding” of APDs, whether or not oil and gas companies intend to drill. After an APD is acquired, even if landowners enter into agreements with companies, until the company decides to drill those minerals, landowners receive no benefit.
“Laramie County landowners really started experiencing challenges in leasing their property because of this issue. If one company has an APD on a particular piece of property, other companies can’t buy minerals or drill, meaning landowners receive no benefits,” Nicklas explains.
A handful of landowners decided to band together in an attempt to solve the challenges they faced, believing they would find strength in numbers.
“The Wyoming Land and Mineral Owners Association was created by a handful of landowners and mineral owners in south Laramie County who noted a challenge in leasing their minerals due to this APD issue,” Nicklas says. “Often, there was a permit already on their property, so companies weren’t interested in leasing their minerals.”
At the same time, a separate group formed, also realizing the need for change. The second group, however, attacked the issue from a stance of litigation.
“The Wyoming Land and Mineral Owners Association didn’t believe a lawsuit was the way to go to reach the end goal. They believe there is a need for public advocacy and changes through regulations or legislation,” Nicklas comments. “Its approach to the APD issue is a three-fold plan.”
The Wyoming Mineral Owners Association is seeking to resolve concerns with APDs using education, partnership and political advocacy.
“In many ways, the education piece is the most important to helping people understand what’s going on with APDs and how to fix it,” Nicklas says. “We have put out a series of newspaper articles around the state to try to clarify some issues surrounding APDs.”
In addition, Nicklas says a series of public meetings is being held in the eastern half of Wyoming to help landowners and mineral owners understand how APDs may affect them and their property.
“The group’s goal is to ensure the general public understands how APDs might impact them and what they can do,” Nicklas comments. “We believe education is best tackled through meetings.”
At the same time, the Wyoming Land and Mineral Owners Association has begun to form partnerships with agriculture organizations and more to work together on these issues.
“The group is finding allies throughout the state that are affected by the issue to form a strong partnership to combat the big oil special interests that are against any meaningful reform,” Nicklas says, noting they have partnered with both the Wyoming Stock Growers Association and Wyoming Farm Bureau.
He adds, “Also, understanding that a solution to this problem must work for both the mineral owner and the industry, we are in contact with operators who are equally affected by the policy as the mineral owners are, and are forming a partnership with these affected operators to ensure that we reach a solution that is fair for everyone.”
Finally, the group will engage in policy advocacy efforts to influence positive changes in regulation, legislation and rulemaking efforts to alleviate challenges for mineral owners.
“We intend to engage in public advocacy efforts and work with legislators through interim committee meetings and more,” Nicklas adds. “Along the same lines, while this organization doesn’t believe litigation should be our first option, they are willing to pursue litigation before a sympathetic Wyoming Supreme Court if necessary.”
With the goal of establishing a long-term, sustainable organization, Nicklas says initial membership costs $250, with an annual fee after of $50. The funds go to carrying out the work of the organization.
“All of our members get a voice and a vote within the organization, which is the most important part,” he says.
With membership available to anyone across the state, Nicklas says they started to grow in the southeast corner of Wyoming first. However, many of the same APD challenge are present in Converse County, as well as in other areas.
“Falen Law Office is the attorney of the group, but we are not the directors or people in charge of running the association,” Nicklas emphasizes. “The Wyoming Land and Mineral Owners Association is run by mineral owners for mineral owners.”
“In the end, we mineral owners must unite,” Nicklas asserts. “For too long we have been divided, while the oil and gas industry has had a powerful and united voice in the state, which can sometimes be to the detriment of the mineral owner.”
Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at email@example.com.