BP in Wyoming

Spill won't hurt operations here, company says
2010-06-11T02:00:00Z BP in WyomingBy DUSTIN BLEIZEFFER - Star-Tribune energy reporter Casper Star-Tribune Online

If President Barack Obama and the American people get their way, British Petroleum could pay billions of dollars to help cover the economic and environmental impacts of the oil spill disaster in the Gulf of Mexico.

While BP's main focus for now is in the Gulf, company officials say BP's Wyoming operations will carry on as planned.

"It is not anticipated that spending on spill response in the Gulf will affect capital investment or production operations in Wyoming, which are proceeding as planned," said Chad Calvert, BP's director of government and public affairs in the Rockies.

The April 20 explosion on Transocean's Deepwater Horizon offshore platform killed 11 workers. The Macondo well it was drilling has continuously spewed massive volumes of oil and natural gas into the Gulf for more than 50 days.

Meanwhile, in Wyoming, some 261 BP employees and hundreds of contractors continue drilling wells and producing oil and gas. Calvert said BP's Wyoming operations are a part of BP North American Gas, which is a separate business unit from BP's Gulf of Mexico Deepwater Business Unit.

"Frankly, I don't see it being affected," Calvert said of BP's North American Gas business unit.

The ownership interest in the leaking Macondo well is split among three companies: BP 65 percent, Anadarko Petroleum 25 percent and Mitsui 10 percent. Anadarko also has a large presence in Wyoming's oil and natural gas fields.

Anadarko stressed that its involvement in the Macondo well is a non-operating interest. Anadarko spokesman John Christiansen described the company's role as a "passive investor."

"That means BP is the operator. They are the ones that control the decisions and planning of the well and that kind of thing," Christiansen said.

Meanwhile in Wyo

BP acquired Amoco in 1998 along with its massive Wamsutter oil and gas field, which spans Carbon and Sweetwater counties. The field stretches about 55 miles by 35 miles while straddling Interstate 80 at Wamsutter. In 2005, BP Exploration and Production committed $2.2 billion to a 15-year drilling program in the field.

BP estimates the field still has more than 72 trillion cubic feet of gas in place -- more than the U.S. consumes in three years. Currently, BP has four "fit-for-purpose" rigs under contract in the field, drilling at a rate of about 150 wells per year, according to the company.

BP has championed its Wamsutter operation as an incubator for advanced unconventional gas production technologies. BP has said it is using the field to focus on remote monitoring, horizontal drilling and other techniques aimed at increasing efficiency and reducing environmental impacts.

"We're avid hunters and fishermen. We love living and working here," BP Wamsutter operations manager Jerry Austin said during a media tour of the field in May 2008.

BP tested cordless seismic imaging in the Wamsutter field, which led to the development of the Firefly 3-D seismic system -- the first cordless seismic trial in the industry, according to BP officials.

Anadarko Petroleum Corp. also employs hundreds of workers in Wyoming, where it owns a lot of mineral interest in the Wamsutter field and throughout the state. In a 2000 deal worth more than $4.4 billion, Anadarko acquired Union Pacific Resources and a massive amount of surface and mineral ownership in a checkerboard pattern across southern Wyoming.

Anadarko also paid $265 million for Howell Corp. in 2002 to acquire the 115-year-old landmark Salt Creek oil field at Midwest.

Anadarko then launched a $200 million enhanced oil recovery project in Salt Creek, injecting carbon dioxide into the field. The project aims to "sweep" some 100 million barrels of oil unattainable through conventional methods.

The effort required Anadarko to seek out hundreds of historic, unrecorded wells and generally clean up the field in order to ensure the CO2 it injects makes an efficient sweep.

But taking on the 115-year-old oil field also meant assuming some big liabilities.

In May 2009, Anadarko Petroleum agreed to pay more than $1 million in penalties and spend another $8 million in environmental remediation and spill prevention measures for oil spills in Johnson, Natrona and Park counties.

The bulk of the oil spill violations occurred in the Salt Creek field, according to the settlement agreement. Anadarko and subsidiaries Howell Corp. and Howell Petroleum Corp. discharged "harmful quantities of oil" on more than 35 occasions between January 2003 and October 2008, according to the Environmental Protection Agency.

Track records

While Congress and federal regulators sort out who will pay for what in the Gulf oil spill disaster, state regulators in Wyoming say they have a handle on oil and gas operations in the Cowboy State.

Wyoming Oil and Gas Conservation Commission supervisor Tom Doll said BP is in good standing in Wyoming. When the Star-Tribune initially asked the agency how much BP has posted in bonds to cover its fee operations, Doll said the commission doesn't normally divulge such information.

Doll later agreed such information is public record. BP has posted a "blanket bond" with the commission in excess of $12.4 million.

"They are sufficiently bonded. That's a lot of money in place," Doll said.

Others worry that both the industry and government are just as unprepared to deal with a major environmental catastrophe onshore in Wyoming as they were offshore in the Gulf of Mexico.

"If something would happen to the Green River, we would not be able to deal with that," said Steve Belinda, energy policy manager for the Theodore Roosevelt Conservation Partnership.

The Wyoming Department of Environmental Quality has issued citations to both BP and Anadarko for various, alleged violations.

For instance, BP paid $200,000 for allegedly failing to obtain a modification permit before removing a recompressor at its Whitney Canyon Gas Plant in Uinta County, according to DEQ documents. BP said it was its own staff that discovered the non-compliance oversight, and notified DEQ.

Anadarko has paid tens of thousands of dollars to Wyoming DEQ for alleged environmental violations in recent years, in additional to a multimillion-dollar settlement with EPA.

Both companies have also donated a lot of money in Wyoming communities and to the University of Wyoming. Anadarko's lifetime giving to the university is in excess of $1.7 million, according to the university. With state matching funds, the total is more than $3.2 million.

BP's lifetime giving to the university exceeds $6.8 million, or $9.8 million with state matching funds, according to the university.

Calvert said BP intends to maintain its Wyoming operations no matter what is in store for BP in the Gulf.

"What's going on in Wamsutter is a matter of drilling out our reserves," Calvert said. "Certainly there's been no discussion of this having an impact on our employee base."

Christiansen reiterated that Anadarko played no operational role in the Deepwater Horizon/Macondo well blowout.

"Our operations in Wyoming have been unaffected by the events in the Gulf of Mexico," Christiansen said in a written statement. "Wyoming is an important part of our global business, and our operations are vital to the state's economy and our nation's supply of domestic energy. We strive to be a responsible and accountable operator that works to safely produce the energy we all need, and at the same time protect the environment and public health."

Contact energy reporter Dustin Bleizeffer at (307) 577-6069 or dustin.bleizeffer@trib.com. Go to http://tribtown.trib.com/DustinBleizeffer/blog to read Dustin's energy blog.

Facts & figures

BP's 2009 Wyoming production

* 199,447,858 cubic feet of natural gas

* 2,639,769 barrels of oil

Wyoming taxes and royalties

In 2008, BP paid $135.8 million in severance and ad valorem taxes and $13.4 million in state royalties directly to Wyoming and Wyoming counties.

BP employees

* 261 BP employees work in Wyoming

* The company estimates its Wyoming activities employ a range of 800 to 900 contract employees -- mostly in Wamsutter -- in drilling, well construction, transportation, completions and various other oil field services.

BP assets in Wyoming

* Wyoming Overthrust/Whitney Canyon, which also includes the Painter Natural Gas Plant near Evanston.

* Moxa Arch near Granger.

* Jonah Field in Sublette County.

* Wamsutter Field at Wamsutter.

BP's Wamsutter Field

* In October 2005, BP announced a 15-year drilling project in the Wamsutter gas field. The project includes a $2.2 billion outlay and the drilling of 2,000 wells.

* The company estimates the field currently has more than 72 trillion cubic feet of gas in place. Currently there are four rigs under contract, drilling at a rate of about 150 wells per year.

BP giving in Wyoming

* In 2007, BP donated $5 million to the University of Wyoming ($3 million to the School of Energy Resources and $2 million for wind research).

* BP provides about $150,000 annually in local grants to organizations such as 4-H, youth rodeo, Big Brothers/Big Sisters, Race for the Cure and a new college scholarship fund.

* Since BP's Wamsutter operations spurred new growth in the tiny town, BP has helped the community meet several needs. BP funded construction of a day care center and provided $1 million in an endowment to support its operation. BP also provided $500,000 to Wamsutter Community Inc., a nonprofit that supports local economic development through a funded position at Wamsutter, and supports the new health clinic.

* In 2009, BP provided $3 million for local infrastructure development (sewer, street improvement, and construction of the health clinic), to be matched with funds from the state of Wyoming. BP also provided $260,000 for additional local economic development efforts.

-- Compiled by Dustin Bleizeffer, Star-Tribune energy reporter

Recent violations

Here's a list of violations issued by the Wyoming Department of Environmental Quality since 2008:

BP America

* In September, BP America signed a settlement agreement with DEQ to pay $25,000. The settlement stemmed from an alleged failure to comply with the permit requirement for routing vapors to the emission control device for the Whiskey Buttes 367-09E facility in Lincoln County. A BP official told the Star-Tribune that BP did not construct the system and agreed to correct that system and all others like it.

* In October, DEQ issued a "notice of violation" to BP America Production Co. for allegedly failing to comply with the permit requirement for routing vapors to the combustor for the Cabrito 3-25 well-site facility in Sublette County. The matter remains unresolved. BP said it is voluntarily modifying an automated monitoring system for 10 sites in the Jonah Field that could help with early detection and response.

* In December 2008, BP agreed to pay $200,000 for allegedly failing to obtain a modification permit before removing a recompressor at its Whitney Canyon Gas Plant in Uinta County. BP said it was its own staff that discovered the non-compliance oversight, and notified DEQ.

Anadarko Petroleum

* In September, Anadarko Petroleum signed a settlement agreement with Wyoming DEQ, agreeing to pay a $15,000 civil penalty and an additional $28,400 to a DEQ air quality monitoring fund. The company allegedly vented volatile organic compounds and triethylene glycol and failed to obtain a permit before installing a third dehydration unit at its Monell Production Battery in Sweetwater County.

* In June 2009, Anadarko agreed to pay $1,500 for allegedly pushing mining materials over an embankment covering native topsoils in Johnson County.

* In May 2009, Anadarko Petroleum agreed to pay more than $1 million in penalties and spend another $8 million in environmental remediation and spill prevention measures for oil spills in Johnson, Natrona and Park counties.

The bulk of the oil spill violations occurred in the Salt Creek field, which spans Natrona and Johnson counties. Anadarko and subsidiaries Howell Corp. and Howell Petroleum Corp. discharged "harmful quantities of oil" on more than 35 occasions between January 2003 and October 2008, according to the EPA.

-- Compiled by Dustin Bleizeffer, Star-Tribune energy reporter

Copyright 2015 Casper Star-Tribune Online. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

No Comments Posted.

Untitled Document

Civil Dialogue

We provide this community forum for readers to exchange ideas and opinions on the news of the day. Passionate views, pointed criticism and critical thinking are welcome. Name-calling, crude language and personal abuse are not welcome. Moderators will monitor comments with an eye toward maintaining a high level of civility in this forum. Our comment policy explains the rules of the road for registered commenters.

If your comment was not approved, perhaps...

  1. You called someone an idiot, a racist, a dope, a moron, etc. Please, no name-calling or profanity (or veiled profanity -- #$%^&*).

  2. You rambled, failed to stay on topic or exhibited troll-like behavior intended to hijack the discussion at hand.

  3. YOU SHOUTED YOUR COMMENT IN ALL CAPS. This is hard to read and annoys readers.

  4. You have issues with a business. Have a bad meal? Feel you were overcharged at the store? New car is a lemon? Contact the business directly with your customer service concerns.

  5. You believe the newspaper's coverage is unfair. It would be better to write the editor at editors@trib.com, or call Editor Jason Adrians at 266-0545 or Content Director David Mayberry at 266-0633. This is a forum for community discussion, not for media criticism. We'd rather address your concerns directly.

  6. You included an e-mail address or phone number, pretended to be someone you aren't or offered a comment that makes no sense.

  7. You accused someone of a crime or assigned guilt or punishment to someone suspected of a crime.

  8. Your comment is in really poor taste.

Add Comment
You must Login to comment.

Click here to get an account it's free and quick

Featured Businesses

Latest Offers