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Oil and Gas

Casper – With widespread public comment on the issue, the Wyoming Oil and Gas Conservation Commission (WOGCC) heard from the public on March 9 regarding setback rule changes at the WOGCC building in Casper.  

The rule proposes to change the current setback, or the distance that drilling equipment and associated production facilities must be from an occupied structure, which has sparked controversy across the state. 

 “The rule does several things,” said WOGCC Supervisor Mark Watson. “First, we defined occupied structure as a building that was specifically constructed and approved for human occupancy, such as a residence, school, office or hospital.” 

The setback distance was also changed, and Watson mentioned that if a well is within 1,000 feet of an existing occupied structure, there are additional requirements. 

“Under part two, the Supervisor is provided with consideration of how the operator provides communication and comments between the operator and landowner,” Watson noted. “I also have the right to waive these requirements if the landowners approve the waiver in writing.”

Scientific evidence

In providing their comments, the Petroleum Association of Wyoming (PAW) detailed several studies directly related to the setback requirements. 

“The proposed rule respects Wyoming tradition of working with landowners to achieve a mutually agreeable solution,” said John Robitaille of PAW. “We specifically support the setback of 500 feet, with the variance, and we support engaging with developing active participation.”

Increasing the setback distance beyond 500 feet, PAW noted, would dramatically decrease access to resources, particularly in Laramie County, where setback distances are hotly debated. 

Melanie Peterson, a geologist, noted that under the current setback of 350 feet, the percentage of land available for well pads is 81.6 percent. 

“If we switch that to 500 feet, the percent availability diminishes to 70.8 percent,” she continued. “If we use a setback of 2,640 feet, the percent of land available diminishes to two percent.”

“There is an expectation and mechanism for productive communication for operators and landowners where mitigation measures can be tailored to site-specific locations,” PAW added. 

Ag perspectives

Wyoming’s agriculture groups also commented on the setback rule during the meeting and through written comment. 

Wyoming Stock Growers Association Executive Vice President Jim Magagna mentioned, “This is about more than just a number. There is no single setback distance that is ideal for the interests of both parties in every instance. However, the proposed 500-foot standard represents a norm that is more reasonable than the current 350-foot setback.”

Variance

The rule also allows for deviations from the 500 feet in the event of an agreement by all parties involved.

Magagna said, “The success of the proposed rule will rest upon the commitment of the Supervisor and the Commission to fair consideration of requests by either landowners or operators for a variance.”

Rocky Mountain Farmers Union (RMFU) also expressed support of the changes, particularly in light of the variance language in the rule.

“We are in support of the proposed setback increase from 350 feet to 500 feet as an acceptable solution,” RMFU Lobbyist and Government Affairs Representative Scott Zimmerman said. “We note the mineral estate is dominant over the surface estate and could visualize circumstances whereby a mineral owner could be prevented from accessing his mineral interest if setback distances are expanded greatly.”

Zimmerman added positively, “We also note the language of issuance of a ‘variance,’ which can increase or decrease the setback distance in special situations.”

Reasonable approach

The Wyoming County Commissioners Association (WCCA) also agreed that 500 feet was a reasonable solution, noting, “The proposed rule change covers all lands in Wyoming, but clearly is a response to the private lands oil and gas activity that has begun to play a larger role in our counties without much federal land. These new activities requires us to take a careful look at the balance of development and resident health and safety.”

“We believe that increasing the setback to 500 feet is a reasonable approach and particularly appreciate the flexibility granted to the Supervisor to grant a variance in either direction for good cause,” WCCA President Richard Ladwig added.

Wyoming Farm Bureau (WyFB) took a more strong stance, noting that membership is supportive of setback increases if, “the rule remains flexible enough to not impede current ranching/farming practices. We would not recommend increasing the minimum required distance.”

Further, WyFB’s Holly Kennedy urged the WOGCC to consider the  negative impacts that Colorado has seen in raising their setback. 

Other side

While many groups supported the setback change, Powder River Basin Resource Council stood with some concerns. 

“Our organization’s members deeply believe that Wyoming must significantly increase the setback distance between oil and gas wells and places where people live and work,” PRBRC’s Staff Attorney Shannon Anderson said. “The choice is ours – Wyoming can be a leader and set a new national standard or we can be a source of growing controversy and problems in communities across the state.”

PRBRC cited concerns about health and human safety, as well as quality of living and other property impacts, advocating for a one-quarter mile setback. 

“Landowners near or adjacent to these facilities who do not own the mineral estate or the property where the well is proposed to be drilled are virtually powerless and have no effective say in the location of these facilities,” Anderson continued.

The impacts to homeowners, such as noise and light pollution, are significant.

“We advocate for a  greater setback,” Anderson finished. “We also believe the Commission requirements to balance oil and gas development with the protection of health and safety requires a greater setback than 500 feet from these multi-well industrial sites.”

The WOGCC will continue to deliberate the setbacks. 

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

By Jennifer Womack WLR Managing Editor

Casper – “Boom and bust” has become so intertwined with Wyoming’s history many assume its future occurrence without question. Wyoming State Geologist Ron Surdam calls the mindset “detrimental” and predicts the Cowboy State won’t see a repeat of the “bust” part of the cycle anytime soon.
    “The nation is as dependent on Wyoming for energy as they are the OPEC nations,” said Surdam at the Feb. 11 portion of the Governor’s “Building the Wyoming We Want” conference in Casper. “I don’t see, short of a global depression, how Wyoming could go into a bust when the nation is so dependent on the state.”
    “We now export 10 quadrillion BTUs of energy,” said Surdam. “How could you have a bust when you’re supplying 10 percent of the energy to the U.S.?”
    “As a geologist I start by looking at the state’s mineral resources,” said Surdam. Noting a decline in the state’s oil production from 1970 to 2000, he says that trend has been reversed by Anadarko’s use of new technology in oil recovery. With a leveling off of the decline he said, “I suspect we’ll see some modest increases.”
    With steady increase from 1970 to 1990, Surdam said Wyoming is now producing about 450 million tons of coal per year. By 2010 that number is predicted to reach 500 million tons using existing infrastructure coupled with larger equipment, bigger train cars and longer trains.
    “Where we’ve shown spectacular growth in terms of production is natural gas,” said Surdam. “Natural gas production was relatively modest and flat until 1995 with the onset of the Pinedale Anticline.” Today, Surdam said Wyoming is producing two trillion cubic feet (TCF) of gas annually. With new permits on the verge of completion he said, “We could quite easily reach 3.6 to 4.0 TCF, almost a doubling of gas.”
    “There’s some bottlenecks,” said Surdam noting pipelines and transmission lines. “It’s about the only thing that controls the pace of production.” He predicts production would climb in unison with expanded pipeline capacity.
    “It looks to me like it’s going to take a crisis,” said Surdam of the need for infrastructure. “I don’t think we’re going to see the federal government move short of a crisis. He mentioned canceled power plant projects across the nation, some in Wyoming, to underscore his point. If we had a crisis and we can get through it, we’d go from a ‘boom’ to an ‘explosion.’”
    Surdam said a close look at the electrical grid and growing demands reveal how close to a crisis the western U.S. may be. “To maintain the kind of economy and growth in the economy that we’ve all enjoyed and benefited from the last two decades, we need an increase of about two percent a year. To get from now to the year 2030 we’re going to need 80 Jim Bridger Power Plants, we’re going to need 13 large natural gas fired plants, five nuclear reactors and 75,000 wind turbines.” In a follow-up conversation with the Roundup Surdam said the figures are based on an annual report from the U.S. Department of Energy.
    Most of the equipment to meet the demands, as Surdam pointed out, lies overseas and involves a multi-year waiting list.
    As capacity is app-roached on the electrical grid Surdam said reliability is lost. “The National Regulatory Commission is predicting black outs and rolling brown outs in the western United States as early as 2009 and as late as 2011. There’s not enough time to solve the problem.”
    In the meantime Surdam said, “The value of energy and the power resources in Wyoming will increase substantially.” Demand, he predicted, will outpace supply in the near future. “We’re one of the few states in the nation with the capacity to increase power and energy production.”
    Crisis will bring pressure to Wyoming where resources are abundant and half the state is owned by the federal government. Surdam said it’s imperative for Wyoming to chart its own course in the near future before it’s decided by those looking to Wyoming in a state of panic to meet energy needs that have outpaced supplies.