Landowners east of Cheyenne say a major oil and gas firm is developing a monopoly in their county, and they have asked state regulators to put a stop to it by denying thousands of permits to drill proposed by Anadarko Petroleum.
Anadarko tried to have the protests dismissed by the Wyoming Oil and Gas Conservation Commission on Tuesday, disputing a number of the landowners’ assumptions, but the board agreed to allow a hearing at a future date for landowners to make their case.
“That does not mean, necessarily, that I am swayed,” Commissioner Bridget Hill, director of the Wyoming Office of State Lands and Investments, told the landowners’ counsel, Kris Koski. Koski is a University of Wyoming lecturer and a lawyer with Long, Reimer, Winegar, Beppler in Cheyenne.
What the landowners would have to prove is a threat to their mineral rights or evidence of wasted resources due to Anadarko’s actions.
The landowners involved all have mineral ownership that they say they want developed. They argue that a handful of other companies, such as EOG Resources and Helis Oil and Gas Company have a record of drilling in the county, particularly in recent years after EOG made gains in the Codell formation. EOG’s success has created a race to stake claims in the area while they are still available, Koski said.
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“Recently, Anadarko has upped its effort in filing permits to blanket as much of Laramie County as it possibly can,” he said.
But what landowners fear the company is doing is taking a big piece of the pie without the intent to drill anytime soon. However, other companies, both small and large, are interested in getting to work. Sitting on permits, the landowners say, is a waste of resources.
Anadarko’s 2,200 applications to drill for oil and gas could not feasibly be drilled within the two-year time period before a permit to drill expires and the company’s “monopoly” makes the landowners’ minerals more difficult to lease, Koski argued.
“Its program effectively leases up Laramie County” by dominating drilling and spacing units across the area with approved permits to drill, he said.
A lawyer for Anadarko, one of the largest firms operating in Wyoming, disputed the claim that the firm is creating a monopoly and pointed out that only Anadarko can speak for the company’s future drilling plans.
“Anadarko’s competitive advantage here should not be held against them,” said Jim Mowry of Crowley Fleck. “Mr. Koski’s clients have every right to go out and develop their minerals just like Anadarko has, and Anadarko has taken steps to do so.”
Regardless of the company’s drilling plans, Anadarko has done everything right up to this point, he said. Its applications are technically sound and should be approved, he added.
The wasted resources claim is a weak argument, he said. Waste can’t happen before operations have even begun, Mowry said.
If they want to fight over their constitutional rights, they need to take the matter to court, he said.
Though the commission allowed the landowners’ protest to move forward, and the commission will hold a hearing on the case, Hill said she was troubled by some of the landowners’ arguments.
She also cautioned them regarding the commission’s jurisdiction, siding with Anadarko’s lawyer.
“I do believe Mr. Mowry is right,” she said. “While we do have an obligation to follow the constitution, an administrative agency is not the person to make a determination on a constitutional argument.”
Follow energy reporter Heather Richards on Twitter @hroxaner