The current minimum distance is 350 feet. The Wyoming Oil and Gas Conservation Commission will consider Tuesday whether to expand that to 500 feet.
The petroleum industry says it can live with a 150-foot increase even though that will limit their options for drilling and cost more.
Others say a 500-foot setback distance is not enough to protect people from noise and air pollution. Environmental groups say the distance should be at least a quarter of a mile.
The proposal follows an oil boom that put drilling closer to homes in eastern Wyoming.