Senate Transportation

Sen. John Barrasso oversees a March 1 hearing on Capitol Hill in Washington.

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Last week in numbers

Friday oil prices: West Texas Intermediate (WTI) $65.91 Brent (ICE) $71.81

Natural gas weekly averages: Henry Hub $2.96, Wyoming Pool $2.63, Opal $2.66

Baker Hughes rig count: U.S. 1,057, Wyoming 29

Quote of the Week 

“People are a lot more intrigued by the Powder River Basin than they were a couple years ago. Permian’s been discovered. They know what it is and the leases are taken up. But, the Powder River Basin is still relatively new compared to other ones. Every time we see these new wells, production gets better and better. So, the interest is there.”

--Mark Watson, supervisor of the Wyoming Oil and Gas Conservation Commission

Energy Journal Podcast 

Back to basics for the podcast this month, with an open window on the reporting that ends up in the Star-Tribune. Energy reporter Heather Richards recently sat down with Jimmy Goolsby, a longtime geologist in Wyoming's oil and gas industry. The podcast covers their discussion of the increasing interest in the Powder River Basin.

Fines and flaring

It was hearing week at the Wyoming Oil and Gas Conservation Commission and a motley collection of topics came up Tuesday. 

Petro-Hunt was fined $20k for failing to do baseline water testing before spudding a well. The commission bumped the fine up from the original proposal from staff because of the seriousness of the violation. It's not a common error before the commission, but some commissioners noted how grave of an error it was, partly because of the public's perception of both rules and broken rules. 

ATX Energy will be allowed to vent well over the daily limit from three wells over the next six months. The company, in collaboration with Meritage, is likely going to add a pipeline to connect to a nearby gas system, but wants to know if the resource justifies the expense. 

A long hearing capped off the day without resolution. Jonah Energy and Exaro Energy are at odds on how to develop in the Jonah field: horizontal wells that go north to south or wells drilled east to west. There's a significant amount of background coloring the debate and the commission's decision will impact how development plays in some of those sections going forward. But, the dispute hinges simply on orientation. After four hours of testimony, the hearing was continued until September. 

Gunning for the coal port

Sen. John Barrasso is suggesting pretty significant changes to the Clean Water Act, spurred by his frustration of Washington state's denial of a coal port terminal. Barrasso wants to limit the 401 certification program, which gives states the right to put water projects through a review process, because he sees it as being abused. 

Experts say it's a pretty significant ask. The 401 program predates the Clean Water Act and has been interpreted as a fairly broad authority in court decisions. 

Industry gives and it takes away

Everybody in Wyoming knows that the oil and gas industry has seen improvements: more jobs, more drilling, more production. But the oil and gas industry, as fundamental as it is in Wyoming, isn't driving a significant turnaround in local dollars. Sales and use taxes are good, but the budgets are much boosted from Johnson County to Sweetwater. 

Coal production

Stability doesn't necessarily look like stability in Wyoming's coal basin. Production is up at some mines, even low heat mines competing in a tough market, while it's down at others. The predictability of mine output appears to be a thing of the past as mines contend on a spot market.

Also, the weather was bad this spring. 

In other news …

Blackjewel LLC, the eastern company that acquired Eagle Butte and Belle Ayr may finally get permitted for those mines soon. They've submitted their application, including their bonding assurances, to the Wyoming Department of Environmental Quality. The company obtained leases in February, but until Thursday it had not taken steps to post bonds. 

Contura Energy, which sold the mines to Blackjewel in December, is still on the hook for reclamation obligations at the mines until the Department of Environmental Quality approves the transfer of permits. 

The Wyoming Oil and Gas Conservation Commission is now getting their rig count from Drillinginfo, which offers far more detail than Baker Hughes, and puts the current count in Wyoming at about 41, with 17 in Converse County. BH counts 29 in the state right now. Rigs are so efficient now that it may be hard for the big firm to keep track of their moves, said Mark Watson, WOGCC supervisor. 

Clean Power Plan 2.0 is expected from the Environmental Protection Agency any day now. The Obama-era regulation sought to cut carbon dioxide emissions from the electricity sector and would have had largely targeted coal power. 

Politico reported Tuesday that the draft obtained by the news site revealed a plan likely to spur lawsuits. It looks weaker and may give states the ability to build their own regs or opt out.

Colorado will look at an initiative in November increasing the setback from oil and gas wells to 2,500 feet. That would put 4 out every 5 acres of non-fed land in the state out of bounds for the industry, according to the Denver Post. The setback initiative has a number of operators spooked, while some in Wyoming are hoping that at least that could push some companies north of the border. 

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Follow energy reporter Heather Richards on Twitter @hroxaner


Energy Reporter

Heather Richards writes about energy and the environment. A native of the Blue Ridge Mountains in Virginia, she moved to Wyoming in 2015 to cover natural resources and government in Buffalo. Heather joined the Star Tribune later that year.

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