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Oil companies, landowners spar over setbacks

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Energy companies and landowners sparred over a proposal to increase the minimum distance between wells and homes during a meeting before the Wyoming Oil and Gas Conservation Commission on Monday. 

Oil companies sought to highlight the economic value derived from energy development. Landowners focused their comments on public health concerns raised by drilling near homes, schools and businesses. 

The debate laid bare the difficult task before the oil and gas commission, which has proposed increasing the minimum distance between homes and wells from 350 feet to 500 feet.

Gov. Matt Mead, a commission member, has advocated for the increase, saying it is needed to prevent conflict between oil companies and homeowners. The commission initially proposed a 750 foot setback for horizontal wells before settling on the 500 feet in the current proposal. 

Energy interests said the 500 foot distance represented a compromise with landowners. Anything more, they argued, would endanger the property rights of mineral owners and oil companies by pushing well pads further from the minerals they seek to reach.  

"The perceived benefits result in a very real burden," said Lynne Boomgaarden, a Cheyenne attorney who presented on behalf of the Petroleum Association of Wyoming. 

Landowners took the opposite view. Numerous Laramie County residents, where much of the recent drilling occurred, spoke of oil development near their homes harming property values and creating noise, light and traffic. Mostly, they expressed worry nearby drilling was threatening the health of their families.

They pushed for a setback of 1,320 feet, saying a large distance would help minimize the impacts of development.  

"Under the current and proposed setback, you're ruining peoples' lives," said Wayne Lax, a Laramie County resident. 

Much of the controversy owes itself to an uptick in drilling around Cheyenne in recent years, and to the nature of mineral ownership in the region. 

Many of the homeowners living in new subdivisions ringing Cheyenne do not own the mineral rights beneath their houses. Those rights are often owned by another party and leased to oil companies.  

The meeting also highlighted some of the technical aspects of the proposed rule change. It would require oil companies to notify surface owners living near a planned well 30 days before it was drilled.

The proposal also calls on companies drilling within 1,000 feet of a home to submit a mitigation plan outlining how they intend to reduce the impacts on homeowners. 

Industry representatives framed those moves as a positive, saying they would go a long way toward addressing landowners' concerns.

"My experience is it is much more about communication, mitigation and planning," said Dennis Ellis, a lawyer for Anadarko Petroleum. Those efforts, he added, can help ease the burden on both sides. 

Landowners again disagreed. They said a 30-day notification period is insufficient to learn about their rights. Oil companies, meanwhile, have little incentive to negotiate in good faith since drilling plans are already set, landowners argued. They pointed to Colorado, noting regulators there require companies notify homeowners 30 days before a permit application is filed.

The oil and gas commission meets Tuesday, but is not expected to finalize the setback rule until its April meeting at earliest. 

Reach energy reporter Benjamin Storrow at 307-335-5344 or Follow him on Twitter @bstorrow


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