Alex Bowler trains hunting dogs and fires rifles on his 35 acres of property east of Cheyenne.
An oil and gas company applied for a 1,288-acre unit that includes his lot.
He’s not sure if the company will choose to drill on his property.
If it does, he has demands. Bowler’s problem, though, is that the company isn’t obliged to accept them.
“I am the low man on the totem pole,” he said.
A bill touted as a way to bring the energy industry and landowners to the bargaining table cleared its first vote in the House on Wednesday. It may be the solution Bowler is looking for.
Senate File 83 would hike the bonding requirement on energy producers from $2,000 to $10,000 on split-estate leases, land agreements under which one party owns the surface area and another owns the mineral rights.
The bill passed the Senate last week and is now three votes away from landing on Gov. Matt Mead’s desk.
Bonds provide landowners some guarantee that if a company goes bankrupt or leaves without reclaiming land there will be money to help them restore their property to what it was before the energy company arrived.
Bill sponsor Sen. Jim Anderson, R-Glenrock, said $2,000 is too small a sum. It doesn’t provide oil and gas companies enough incentive to hash out deals with landowners, he said.
“The best thing for Wyoming is the ability for people to sit down and work things out,” he said.
If energy companies want to drill on private land, they must apply for a permit with the Wyoming Oil and Gas Conservation Commission. If the commission approves the permit, companies must pay a bond before drilling commences.
Companies and landowners usually tailor agreements for each specific operation on private property. But that’s not always the case.
Companies can begin operations as long as they have received the oil and gas commission’s approval and paid the $2,000 bond. They must notify the landowner a minimum of 30 days after commission approval before beginning to drill.
Laramie County residents are seeing an influx of drilling developments. Bowler is president of the Cheyenne Area Landowners Coalition, a group of 54 locals who are feeling the effects.
He has a laundry list of concerns about the potential drilling of his backyard. He said the extra $8,000 may make negotiations with the energy company more interesting.
The minimum distance a well pad can be from a home is 350 feet. He wants the drill pad to be at least 900 feet away from his home.
“Can you image a well pad, methane gas, traffic and noise that close to your house,” he said.
He doesn’t want the company using his private road. He also wants the company to build a fence so his dogs don’t wander into the drilling pad.
Landowners can appeal to the commission to keep the company off their land. If the commission rules in favor of the company, the landowner can appeal in a Wyoming district court.
For landowners, the legal fees can stack up pretty quickly, said Bill Bensel, a lobbyist for the Powder River Basin Resource Council, a Sheridan-based advocacy group for landowners.
Raising the bond amount is the fair thing to do, he said.
“The scale of drilling throughout the state is up,” he said. “The money companies are making is up. The bond should be up.”
Anderson, the sponsor of the legislation, received a swarm of concerns from his constituents in Carbon County.
A hotbed of drilling activity exploded in his district in the past year. A study showed that traffic on one road jumped from eight vehicles per day to 800 during the course of a year. He said 5,000 more wells are expected in Converse County in 2014.
He sponsored the bill in hopes of saving his constituents the trouble of hiring a lawyer.
“I don’t think a $10,000 bond is an unreasonable request in order to bring people to the table and avoid litigation, cost of attorneys and time taken away from the ranch,” he said.
In 2013, there were 3,456 split-land leases in Wyoming. Of those, 13 cases led to landowners looking to stake claim to the company’s bond.
Only one of the 13 landowners objected to the bond amount, said Bridget Hill, director of the Office of State Lands and Investments, the arm of the state that works with the oil and gas commission.
All the blame shouldn’t be thrust on the energy industry, said Bruce Hinchey, a lobbyist for the Petroleum Association of Wyoming.
He said some landowners are obstinate, creating unreasonable demands and refusing practical solutions.
“There are bad actors on both sides,” he said. “It’s not just an oil and gas operator.”
The bill passed by an 8-1 vote, but lawmakers are likely to try to amend it on the floor.
Rep. Michael Greear, R-Worland, voted for the bill, but not before expressing discontent. Companies that don't reclaim land or repair damage to private landowners are liable. Landowners can take them to court, he said.
“I suppose I am going to pass this along because it makes everyone feel good,” Greear said. “Sometimes that’s my job as a policymaker, but I don’t think this bill solves the problem.”