A rare overhaul of regulations in Wyoming’s oil and gas sector could soon take effect, after public officials voted to advance a new permitting rule earlier this month. The changes aim to stem the unprecedented tide of drilling applications flooding the state and “level the playing field” by allowing operators, both big and small, access to the state’s oil-rich land.
As part of the next step in the rule-making process, the state’s Oil and Gas Conservation Commission will host a public meeting to discuss the potential amendment and answer questions at 10 a.m. Tuesday.
The commission received over 59,000 drilling permit applications from oil and gas operators since 2016 — a record number for the state’s overburdened commission. But not all companies immediately start drilling upon receiving the green light from the regulatory body, a source of tension between companies, public officials and surface owners.
As the current rule stands, a company can become an operator of a drilling spacing unit even if it has no immediate plan to extract oil or gas. Some companies have amassed dozens of permits without drilling, which some surface owners say is stifling healthy competition.
According to the proposed rule change, Wyoming will remain a “first-to-file state,” meaning “if someone wants to drill a well, pursue a permit (first),” Supervisor Mark Watson said at a hearing held in July.
But the new rule also gives other interested operators more opportunities to file a hearing application for a permit, known as an APD, if they do so within 15 days of receiving a horizontal well application notice, according to the proposal. An operator who is second to file can challenge a first-to-file APD without waiting for two years, according to Watson.
If approved, the rule could result in a small uptick in drilling, but in the long run, the state’s rig count would likely stay stable, Watson said. Other factors, including the quality of rock in a spacing unit or oil and gas prices, have more influence than regulations on drilling activity, Watson said.
The race to claim drilling permits across the state may be ebbing too. In June, the council received just under 3,000 applications, a 36 percent decrease from the month before.
Tuesday’s public meeting will be held at the Oil and Gas Conservation Commission, located at 2211 King Blvd. in Casper. The public can also submit comments on the new rule to the commission before 5 p.m. Mountain Time on Sept. 14.