The Wyoming House of Representatives began debating a bill that would increase the bonding required from oil and gas developers who need to drill on private surface land.
The bond is used in lieu of a negotiated surface use agreement between landowners and energy companies. The agreement established payment for surface damage. Currently the bond is two thousand dollars and the bill would raise it to ten thousand dollars.
The Wyoming Oil and Gas Conservation Commission is planning to review several controversial issues, including flaring, well-setbacks and bonding, starting in March.
Those topics have come up a lot in recent years, with the boom in drilling. The Powder River Basin Resource Council asked the Commission to address them last year, and so have several residents in recent opinion pieces in the Casper Star-Tribune.
The Wyoming Senate began debate on a bill that would increase bonding requirements for oil and gas operators on split estate properties.
The bill would increase the bond for operators drilling on land where they don't own the surface rights from two-thousand dollars to ten thousand. Supporters say that operators are causing surface damage in excess of ten thousand dollars.
Senators voted down an amendment to reduce limit the bond to six thousand dollars. Kaycee Senator John Schiffer says the higher bond helps protect landowner rights.
The Senate Minerals Committee approved a bill Monday that would increase the amount of money oil and gas operators have to put up before accessing split estate properties.
A split estate is when a private landowner owns the surface land and not the mineral rights. The bill raises the minimum bonding amount from $2,000 to $10,000. The bond covers any damages to the property from development, when a surface use agreement can’t be negotiated.
According to new estimates from the Governor’s office, plugging abandoned oil and gas wells in Wyoming could cost anywhere from $8 to $32 million.
The smaller figure takes into account only wells that the state knows are abandoned. The larger one includes wells owned by bankrupt methane farming company Luca Technologies and the 2300 wells the state considers ‘at risk’ for abandonment.
That number of 'at risk' wells is twice previous estimates. The Governor's policy director, Shawn Reese, says the discrepancy can be traced back to the Oil and Gas Conservation Commission.
Bankrupt methane farming company Luca Technologies is planning to walk away from its wells on federal lands in Wyoming without plugging them. The company and its subsidiaries have between four and five hundred wells on federal lands, and COO Brian Cree says it's unlikely there will be enough money to clean them up.
“Those wells will just be turned back over to the federal government, and the federal government will be in a position to use their resources to plug and abandon those wells," Cree says.