At yesterday’s hearings, the Wyoming Oil and Gas Conservation Commission (“WOGCC”) released a proposed rule aimed at addressing the increased volume of drilling permits filed in the Cowboy State. The formal bulletin entitled, “WOGCC Proposes Rule to Address Volume of Drilling Permits,” can be found here.
If approved, the proposed rule, released in accordance with Wyoming’s rulemaking guidelines, will change several aspects concerning the filing of Applications for Permits to Drill (“APDs”), according to the bulletin:
Going forward, Wyoming will remain a “first to
file state” for a two-year period
After the expiration of the initial two-year
period, other working interest owners within a drilling and spacing unit
(“DSU”) will be able to file APDs with a time limit placed on the operator to
drill the well
A new checklist will be provided for information
to be included in and submitted with an APD from (i) the operator who is not
the current operator of the DSU and (ii) the operator of the DSU who holds the
oldest pending APD or producing well
To review the
proposed rule, click
here. Prior to the comment
period, a public meeting will be held to explain the rule and answer any
questions. Written public comments will be collected and reviewed during the
45-day comment period.
Stay tuned as we
will be monitoring how this proposed rule develops! This is a big proposed
change that could have many potential consequences for operators.
As I drove from Denver to Sheridan, Wyoming this weekend, two things caught my eye from the highway:
1. Coal: I passed not one, but two trains pulling railcars filled to the brim with coal. It has been awhile since I have seen a full coal train on the move, let alone two within hours of each other!
2. Oil: More derricks are springing up.
Actually, I should say three things caught my eye – the third is that Wyoming is greener than I have seen in many years. The grasses are lush and vibrant, transforming the prairies and hills.
Many may not be aware that Wyoming has been the nation’s leading coal producer since 1986. For more excellent information about Wyoming’s coal production, check out the Wyoming Mining Association’s website, which can be found here.
The coal in the Powder is truly a one of a kind commodity. Wyoming’s Powder River Basin, located in the northeast corner of the state, is known not only for the large size of its mines, but the unique features of its primary commodity. Because thick coal seams lay relatively close to the surface, the Powder lends to cost effective coal recovery operations, keeping costs lower. Further, the coal from the geologic formation there is lower in sulfur, making it cleaner when burned.
Of the roughly 5,500 employees reportedly working in the coal industry across Wyoming, more than 4,500 of them work in the Powder. Coal has always been a big part of Wyoming’ economy, and the commodity’s future is very volatile at this point.
Oil production is on the rise in the Cowboy state. In fact, according to a recent article published by Wyoming Public Media, which can be found here, oil production in Wyoming has risen to its highest level in 25 years.
In short, increases in the energy sector are visually apparent in Wyoming – only time can tell what the future is for Powder River coal and what lies ahead for the oil produced in the Cowboy State. Stay tuned!
“Energy and persistence conquer all things.” – Benjamin Franklin
Discussing topics in the energy sector gives one a certain, well, energy. A charge or *spark* – a bolt of anticipatory excitement and the promise of potential comes from being “in the know.” I just received such a spark …
The U.S. Energy Information Administration (“EIA”) released a new portal this week that will change the way that we analyze state-level energy data in the United States. To be honest, I am very excited about it, in the only way that a true nerd in the energy sector who writes an energy-focused blog can be.
It is called the State Energy Portal and can be found here.
I was instantly pulled to focus on the Rockies, and one clear conclusion was apparent – states in the Rockies, namely, North Dakota, Wyoming and Colorado, produce more energy than they consume. The Rockies are producers. Check out the EIA states overview map here.
Yes, there are obviously other states in the same boat that are producing more energy than they consume (check out Texas, Pennsylvania, New Mexico, Oklahoma and Alaska, for example). However, there is not an entire producing region like the Rockies anywhere else in the United States. States in the Rockies are synonymous with energy production – the Rockies are giants in energy production.
Benjamin Franklin said, “Energy and persistence conquer all things.” That could not be more true for the Rockies, an area of the country built by persistence, grit and tenacity – and also by the energy sector.
The Cowboy State via the State Energy Portal
The state-by-state analysis in
the State Energy Portal is amazingly
instructive. As a native of the Cowboy
State, I was first drawn to the analysis on Wyoming, which can be found here.
produces 15 times more energy than it consumes, which makes it the biggest net
energy supplier among the states.”
Folks from Wyoming are taught from a very young age the importance of producing. Work hard, imagine big, create, labor and focus your effort – produce something valuable with your time. It makes sense that Wyoming is THE giant in energy production.
What is also important, though, is that
the State has a variety of sources to tap for energy production. According to
the State Energy Portal Wyoming analysis, and the internal sources cited within the same:
Coal: 7 of the 10 largest U.S. coal mines are located in Wyoming’s Powder River Basin.
Petroleum: Wyoming is the 6th largest crude oil producer in the U.S.
Oil Production: Wyoming’s monthly oil production is on the rise and in August 2018 reached its highest level in more than 25 years. Most of the state’s oil production increase has come from two primary regions in eastern Wyoming: the Niobrara Shale (due north of the Colorado border) and the Powder River Basin (due south of the Montana border).
Natural Gas: Wyoming ranks among the top 5 states with the most natural gas reserves.
Natural Gas Production: Most of Wyoming’s natural gas has come from fields in the Green River Basin located in the southwest corner of the Cowboy State. Notably, more than half of the state’s natural gas is produced on leased federal land – recently in 2018, the federal government approved a large natural gas project in the basin, which calls for the drilling of 3,500 wells over 10 years.
Uranium: Wyoming has significant uranium reserves and is home to the largest uranium mining operations in the U.S.
Wind: Wyoming has some of the largest wind reserves in the nation and big wind-generating electricity projects are in the works in the State.
Hydroelectric Power: Many people may not know that Wyoming is home to 21 hydropower dams and hydroelectric power is the 3rd largest source of Wyoming’s power generation.
TAKEAWAY: Wyoming is an energy production giant. It provides a variety of sources for energy production, which clearly causes energy-related industries to dominate the Cowboy State. While Wyoming is my personal place to refuel and recharge, it also is a major energy producer for the nation.
It is no secret that Wyoming’s economy is heavily reliant on the energy and natural resources sector. In fact, the primary forces behind the economy of the Cowboy State are mineral extraction, in the form of coal, oil, natural gas and trona, and agriculture.
Wyoming is an attractive place to do business due to state incentives like no income tax and low sales and property taxes; however, Wyoming may become even more of a hot opportunity state in light of the passage of Senate Bill 181 by its neighbor to the south, Colorado.
Colorado has recently taken
serious steps to increase oil and gas regulation and revamp the make-up of the Colorado
Oil and Gas Conservation Commission. As
Governor Jared Polis signed SB 181 into law yesterday, April 16, 2019, many are
trying to anticipate the impact that the bill will have on the oil and gas
industry in Colorado. The future of oil
and gas is uncertain, due in part to the significant reforms mandated by SB
181. For a full discussion of the
sweeping impacts of the bill, check out our prior post here.
I have heard several folks referring to Colorado’s SB 181 as “Wyoming’s Economic Stimulus Package.” The comment has been said in jest, but it got me thinking…
Will the oil and gas industry shift more of its focus to the Cowboy State in the wake of SB 181?
There are several factors that support the theory that Wyoming will greatly benefit from Colorado passing SB 181, including:
Rural Nature of Wyoming – Wyoming is one of the least populated states in the country. In addition, the population of the state is spread out – meaning the population density is very opposite to that of Colorado. As a result, the friction that Colorado has faced with the oil and gas industry as its towns and communities have rapidly expanded into producing areas will be practically a non-issue for rural Wyoming. In fact, the New York Times wrote an article last summer commenting on this issue of the increase of production in Weld County coupled with Colorado’s population boom entitled, “In Colorado, A Fracking Boom and a Population Explosion Collide.” Wyoming is a much more attractive environment for operations than Colorado, given Wyoming’s lower population.
Attitude – Wyoming residents are, in general, supportive of responsible oil and gas development in the state. Talk in Wyoming is positive and hopeful of the boom to come, and folks are making what preparations they can in the hopes of a boom in the oil and gas sector again – welcoming it with open arms. Wyoming residents recognize the value of the revenue that oil and gas operations bring to the state.
Workers with Grit – Wyoming is known for its quality of worker; Wyoming folks work hard and with grit, as working outdoors in all weather conditions requires.
Wyoming presents a favorable opportunity for the energy and natural resources sector to grow, but will the oil and gas industry shift its focus to the Cowboy State in the wake of SB 181?
It is likely that Wyoming will benefit from the passage of SB 181 in Colorado, but only time will tell if SB 181 will be Wyoming’s new economic stimulus package…stay tuned!
March is Women’s History Month. In 1919, the 19th Amendment gave women the right to vote. While we are celebrating the 100-year anniversary of women’s suffrage in the United States, it gives us a great opportunity to spotlight my home state of Wyoming.
Wyoming is not just known as the “Cowboy State” or home to the Salt Creek Oil Field – once the largest producing oil field in the world that boomed and also busted, yet still produces oil today. Wyoming is also nicknamed, “the Equality State.”
2019 marks the 150th anniversary of women’s suffrage in Wyoming – a truly wonderful anniversary, as women were recognized as having the right to vote in Wyoming a good 50 years before women in the rest of the country were guaranteed the same right.
It allowed women to serve on juries as early as
The first female governor in the United States
Tayloe Ross, elected in Wyoming in 1924.
In addition, the women of Wyoming have always been a different sort – full of grit, tenacity and strength. As part of our spotlight on Wyoming this month, a recent project created by Wyoming native, Lindsay Linton Buk, entitled Women in Wyoming must also be highlighted.
The project features “portraits and interviews of women who shape the West” and brings attention to the contemporary women in my home state who are remarkable role models. The project is broken into 3 amazingly inspiring chapters – trust me, it is worth checking out! Give it a listen:
Chapter 1 – Breaking Boundaries – my favorite feature is on Wyoming’s first female Supreme Court Justice, Marilyn Kite
Chapter 2 – Filling the Void – my favorite feature in this chapter focuses on Dr. Diane Noton
Chapter 3 – Power – my favorite feature in this chapter is on Mickey Thoman, “cowgirl, mentor and ranching matriarch of the Thoman Ranch in Sweetwater County, Wyoming” (which is also my home county)
Each Chapter contains 5 separate stories – each with truly breathtaking photographs taken by Lindsay Linton Buk herself, and each story is recounted in the subject’s voice and displayed in podcast format. You get to actually hear the tales told in the subject’s voice, which is really a once in a lifetime opportunity to listen to true stories told by these amazing Wyoming women. This project is so unique and full of energy – it is an absolutely wonderful and inspiring project created by a Wyoming woman to bring these powerful stories to light – it is a “must see.” Check it out!
As part of the Rocky Mountain
Energy Essentials blog, we typically discuss the energy and natural resources
sector of Wyoming; however, Wyoming has been on the forefront in more ways than
just the oil and gas and other extracted minerals area. Its nickname of the Equality State pays
homage to that!
My Alma matter recently started using a slogan that I absolutely love – “the world needs more cowboys” – check out the University of Wyoming homepage here.
However, the Cowboy State is not
just home to cowboys. Wyoming is also
home to deposits of oil, gas, trona, coal, uranium, bentonite, and other
elements – the Wyoming Mining Association website, which can be found here, and the Wyoming Oil & Gas
Conservation Commission (“WOGCC”) website, which can be found here, are both excellent sources for
information on Wyoming’s resources.
Wyoming is no stranger to cowboys or to the booms and busts of the energy sector. In fact, the foundation of Wyoming is deeply rooted in the hard working men and women who are gritty enough to work through the cyclical nature of the energy industry, not to mention those who can withstand the wind and the weather. However, although Wyoming has struggled in recent years due to downturns in the oil and gas industry and the coal sector, Wyoming is increasingly on the radar for future oil and gas production.
According to an article published
in Oil and Gas 360 in late September of 2018 entitled, Wyoming Has 18,000 Drilling Permits in the
Queue for Approval and 30 Active Rigs, “Wyoming regulators have 18,000
applications for permit to drill in a queue awaiting approval” and the WOGCC is
reportedly moving through up to 150 APDs per month. The article
further points out that, “[m]any of those [APDs] will not be approved, but
the activity speaks to increased interest in either drilling in Wyoming or
securing primacy over a drilling area by being the first to secure a permit.”
In addition, the WOGCC has been
forced to take action since it is being bombarded with applications, further
reflecting the spike in interest in Wyoming oil and gas development:
1. Effective with the July 2018 hearings,
because the WOGCC has been so inundated with applications, an Inactive Docket
(“B” docket) was created to lessen the burden on WOGCC staff. Pursuant to the Protest
Policy for Spacing Related Hearings issued on June 12, 2018, any protested
spacing related application that is continued more than once will be
automatically placed on the “B” Docket for a period of up to one year until it
is either resolved by the parties or set for a hearing at the request of either
party. This is an effort to ease the
workload on WOGCC staff and to get the process more streamlined.
2. More recently, effective December 11,
2018, the WOGCC implemented a new hearing policy regarding amending
applications. The full updated policy
can be found here. The new hearing policy provides
that when a hearing application is amended, it will be continued and assessed a
continuance fee – and the applicant will be required to re-notice the
application and provide a new affidavit of mailing. According to Mark Watson, Oil & Gas
Supervisor, this new policy is reportedly
designed to provide the WOGCC staff adequate time to prepare the docket for
It is clear that interest in
Wyoming oil and gas development is on the rise and the good news is that the
WOGCC is taking steps to accommodate the influx. This news is not only good for those in the
oil and gas industry itself, but for all Wyoming folks working in businesses
that help support energy workers.
Stay tuned – we will continue to
monitor the energy sector in the Cowboy state.