Wyoming proposes to increase oil, gas well bonding

Mead Gruver, Associated Press

Wyoming regulators propose to increase the amount of bond petroleum companies must post in case they ever walk away from their oil and gas wells and leave the state with the task of plugging and cleaning them up.

CHEYENNE, Wyo. (AP) — Wyoming regulators propose to increase the amount of bond petroleum companies must post in case they ever walk away from their oil and gas wells and leave the state with the task of plugging and cleaning them up.

The proposed rule change — among several related to oil and gas bonding that opened for public comment this week — follows a bust in Wyoming's coal-bed methane industry. Companies have walked away from upward of 4,000 coal-bed methane wells in Wyoming in recent years.

The Petroleum Association of Wyoming didn't find the changes too objectionable at first blush.

"I'm sure we'll see some people complaining, but overall I think it will be something that we could probably live with," Petroleum Association of Wyoming President Bruce Hinchey said Friday.

Wyoming's coal-bed methane industry boomed in the early 2000s and went bust starting around 2010 due to low natural gasprices. Most coal-bed methane developers facing hard times have plugged their wells themselves. A couple have walked away and left the job to the state.

Contractors for the Oil and Gas Conservation Commission plugged 350 abandoned gas wells last year and have been on track to plug 700 this year.

Right now, companies with more than a small number of wells post a $75,000 bond that covers every well they have in Wyoming. State officials propose doubling that amount to $150,000.

Alternatively, companies currently may choose to post $10,000 bond for each well less than 2,000 feet deep and $20,000 for each well deeper than that. State officials propose changing the individual well bonding option to $10 per foot of depth.

Also, the state oil and gas supervisor could require an additional bond of up to $10 per foot for any idled well. Unlike presently, companies would not necessarily be able to submit a plug-and-cleanup plan in lieu of paying the additional idle well bond.

Requiring a simple, up-front bond large enough to cover any future plug-and-cleanup costs would be a better approach, said Shannon Anderson, an attorney with the Powder River Basin Resource Council landowners' group.

"In general, we believe they are a good idea, but they don't go far enough," she said.

The public can comment through Nov. 20.

The Wyoming Oil and Gas Conservation Commission, which consists of Wyoming's governor and four others, plans to vote on the changes Dec. 8.

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