On Tuesday the Wyoming Oil and Gas Conservation Commission will consider whether to approve an increased minimum “setback” and other proposed revisions to Wyoming’s oil and gas rules. It’s an attempt to minimize the potential for conflicts between drilling and fracking operations and residential areas.
Chances are, the commission will approve the greater setback distance between wells and homes/public facilities from 350 feet to 500 feet — a somewhat ineffectual increase that may or may not afford the appearance of doing something meaningful for landowners.
Commissioners may also choose to include new and revised minimum requirements to buffer the nuisance and hazards of industrial drilling operations from residential areas such as sight and sound barriers and minimum dust control measures. In all likelihood, the request — put forth by landowners and a landowner advocacy group — will be dead on arrival. Another proposal would require earlier notification to homeowners within a larger swath of drilling operations.
Consideration of stricter flaring controls is on the commission’s docket for later in the year.
Staff and the 5-member commission — which includes Gov. Matt Mead — will say they have always welcomed individual landowners to come before the commission to make their case for site-specific stipulations. However the average Joe Landowner rarely stands much of a chance in a hearing against a team of Houston- or Cheyenne-based attorneys representing an oil and gas company.
Whatever the commission decides on these matters will speak to the role the commission plays in conflicts between industry, landowners and residential areas. Does it see its purpose as primarily serving industry by making sure operators meet or exceed federal laws, therefore avoiding litigation, maximizing profit and revenues to the industry as well as to the state? Or does it serve all residents of Wyoming — even if sometimes that means putting individual landowners’ interests before an operator’s interests?
This is a commission that granted extension after extension for operators such High Plains Gas and California-based USA Exploration — both with coal-bed methane gas wells years out of compliance, both seriously delinquent in bonds and fees, not to mention deeply in debt to royalty owners and investors. The commission delayed action for years while thousands of unmaintained wells posed threats to hundreds of landowners and their operations in the Powder River Basin.
Some Wyoming landowners have reported that operators are sometimes willing to make concessions to avoid conflict — even “flipping” a horizontal well to place the drilling pad a mile or two from the operator’s originally proposed surface location.
But what happens when such concessions cannot be worked out between landowners and operators? The commission’s track record for putting industry interests before landowners’ interests suggests it may continue to leave landowners on their own to make their cases individually, rather than set into rules minimum requirements to avoid conflicts.
Need for revision
Landowners say the state’s set of rules to buffer industrial oil and gas activities from residential areas are outdated and provide little to no protections from nuisances such as noise, dust, vibrations and even potentially deadly emissions. This is particularly true given the larger scale of modern industrial activities associated with deep oil and gas drilling.
Drilling operations targeting deep shale or tight-sands oil in eastern Wyoming require large well pads — imagine a plowed area larger than a football field, in some cases — to accommodate fleets of service trucks, batteries of tanks, gas flaring stacks and other equipment. Often, these pads include multiple wells, each at a cost of about $10 million to drill and get on production. The wells plumb some 10,000 feet down and extend horizontally for up to 2 miles.
The existing setback (minimum distance between a well and home or public building/facility) is 350 feet, about equal to a football field. The Powder River Basin Resource Council, and other landowner advocates, have called for increasing the minimum setback distance to 1/4 mile, or 1,320 feet. But so far the commission has agreed to consider increasing the setback to only 500 feet.
Unbelievably, the state has engaged in a discussion about whether the starting point of the setback should begin at the wellhead or at the outermost edge of a well pad. Measuring the setback distance from the wellhead might have made sense before the directional- and horizontal drilling revolution of the 2000s. A setback increase of only 150 feet while still measuring from the wellhead completely negates the intention of the request by homeowners and landowners, according to proponents.
Industry representatives in Wyoming disagree.
“This [proposed 500 feet setback] is a substantial increase in its own right, but it is also reasonable because it allows surface owners and mineral owners the needed flexibility to protect their property while allowing for development,” Petroleum Association of Wyoming vice president John Robitaille wrote in a recent op-ed in the Casper Star-Tribune.
What qualifies as a waste?
Robitaille and PAW also argue that anything further than a minimum setback of 500 feet may result in a loss of minerals that otherwise could be developed, impinging on their lease rights.
“Alternative proposals like extending the setbacks to 1,000 feet or more would exclude over 72 acres around each habitable structure — more than eight times the area excluded by the current 350-foot limit. Excluding that many acres — nearly half of a standard quarter-mile section — would impose a substantial burden on land and mineral owners without compensation for the loss of mineral reserves and could do serious harm to our communities’ ability to provide important public services like schools, roads and public safety,” Robitaille wrote in the op-ed.
It’s interesting that PAW brings up the issue of wasting resources. Operators concerned over the loss of produced minerals based on the difference between a setback of 350 feet vs. 500 feet or 1,000 feet routinely flare — burn off and dump into the atmosphere — large volumes of natural gas. The Wyoming Oil and Gas Conservation Commission, which is tasked with preventing the waste of mineral resources, routinely grants exemptions to the standard limits: 15 days after spudding (no maximum volume) and 60,000 cubic feet per day for unlimited days beyond.
One recent estimate put the industry’s natural gas flaring — intentional waste — at 3.9 billion cubic feet of gas over a 10 month period in Wyoming. That’s a waste of mineral resources that results in lost revenues to the state and to mineral owners. What’s 350 feet vs. 1,320 feet mean for a well that extends for 2 miles?
Many rural homeowners and landowners can attest to the disruption and frustration of living near modern oil and gas drilling activities. Constant industrial traffic and dust is the most common nuisance. Noise, glaring lights at night, vibrations, harmful emissions and blowouts are among the more serious impacts.
And don’t think that the recent downturn in oil prices is any reason for the state to take the issue less seriously. This international commodity swings wildly depending on unpredictable markets and politics. There are 4,120 approved horizontal well permits concentrated mostly in Campbell, Converse and Laramie counties. The U.S. Bureau of Land Management initiated an environmental study envisioning up to 5,000 wells in the eastern-central portion of the state.
Whether it’s oil, natural gas or both, intense drilling will return to Wyoming sometime. The Wyoming Oil and Gas Conservation Commission has an opportunity to establish setback rules that consider different minimum distances, more stringent mitigation and reporting requirements for a host of different scenarios. A good set of rules will help avoid conflict, avoid litigation and possibly a concerted pushback. Does the state and industry really want to see the organized push for bans on drilling and hydraulic fracturing migrate from New York, Pennsylvania and Colorado to Wyoming?
“There’s no say for the property owner. There is no avenue for an adjacent landowner to have any say in any of this,” said Brad Brooks, a homeowner who lives in a rural subdivision outside Cheyenne.
Brooks said he and his neighbors are not against oil and gas development. They simply want a meaningful setback distance between oil and gas wells and their properties, and early notification of operators’ intentions. After making his case to the commission, to the governor’s office and to Wyoming’s congressional delegates, Brooks said he believes the chances are slim for meaningful new requirements for the industry.
“It’s just kind of a helpless feeling,” he said.