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Legislators vow to fight BLM oil bonding rule, discuss legal action

State Representative Chris Knapp (R), State Representative Abby Angelos (R), and State Senator Troy McKeown (R) at a Campbell County Board of Commissioners Meeting on Tuesday, May 21, 2024.

GILLETTE, Wyo. — After a lengthy discussion on new oil bond regulations from local oil business operators at Tuesday’s meeting of the Campbell County Board of Commissioners, local legislators in attendance voiced their concerns and outlined potential responses to the rule.

The Fluid Mineral Leasing and Leasing Processes Rule, enacted by the BLM last month, greatly increases bond costs for onshore oil producers. While the public comment period for the law has long passed, legislators and local business owners discussed ways to potentially slow down or halt the law.

As it stands, the law will go into effect in just over a month on June 22.

Present at the meeting were State Rep. Chris Knapp (R), State Rep. Abby Angelos (R) and State Sen. Troy McKeown (R). Knapp, who sits on the House Minerals, Business and Economic Development Committee, said legislation to help with bonding costs for oil producers was in the works. Staff had been instructed to start crafting a voluntary funding model similar to existing coal programs at their committee meeting earlier this month, he said.

“We have a voluntary coal mining program where they can pay in and the state carries that bond for them. I think something similar with oil and gas would be to have a state voluntary bonding pool, because we we do know the costs of plugging and it depends on the well and the circumstances, but the state, I think, is better adept to covering those costs and then having a voluntary pay-in for that bonding,” he said.

Plugging orphaned or abandoned oil wells can be extremely costly, and business owners said with fewer people doing the service these days, costs could spiral if small producers across the state were forced to abandon current wells over increasing costs.

The Wyoming state code requires all unused wells to be plugged to protect the groundwater supply from contamination.

Angelos also mentioned the Minerals committee in her time behind the mic, and encouraged constituents to contact members who served on it ahead of their next meeting on July 30 in Casper.

All officials present were also quick to point to Senate File 13, a bipartisan initiative that would have authorized the state legislature to establish a fund explicitly for pursuing legal action against any federal mandates regulating the land or resources of Wyoming. The measure was vetoed by Gov. Mark Gordon after making its way through the legislature last session.

Even without that legislation passing, legal action to stop the BLM was top of mind for many on Tuesday.

“We have the standing and capability through the Tenth Amendment to basically tell the federal government to pound sand,” McKeown said, adding that he and several other state senators had sent letters to Gordon over the matter.

Echoing others in the meeting, McKeown said it was disappointing to be arriving to the issue late in the game, but he and other legislators would fight hard for a lawsuit regardless.

Chairman Del Shelstad closed discussion on the subject, highlighting the importance of generating discussion about the issue with the public in Wyoming. “We need to start making the effort to protect this industry more than anybody else,” Shelstad said. “We are the energy capital of America; we need to defend our energy capitalism.”

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