Oil And Gas Surges In Wyoming, Not Only Due To Trump

Nov 9, 2018

An 18-wheeler spins its tires through snowy mud on an undeveloped well-pad in the Powder River Basin. In the bitter morning cold, workers in black overalls and face masks move gravel where oil tanks will soon stand.

Peter Wold, CEO of Wold Energy Partners, has been investing heavily in the Powder River Basin with the fourth most permits for drilling. He's not alone. APDs, which are basically applications to begin drilling, have increased over 400 percent in the past five years. That's according to numbers obtained from the Wyoming Oil and Gas commission.

"Our phone's been ringing off the hook as far as people that want a joint venture with us," Wold said.

Wold's well-pad just under construction.
Credit Cooper McKim

He said this wide-open land is now filling up with trucks kicking up dirt on new roads: "but now there's an extreme amount of interest and activity. I would call it a pre-boom absolutely. We ought to call it recognition of economic exploration for Wyoming."

Analysts say a perfect storm is making the country's largest coal state favorable for oil and gas. Carl Larry, who advises oil and gas companies through the financial consulting firm Refinitiv in Houston, said it's a combination of several factors including higher prices, Trump administration policy, and better technology. Specifically, the improvement of fracking. Wells can extract a lot more oil and gas than they used to from the same land.

"It makes it economical, but it makes it more efficient, and I think that's where we're seeing the results on profitability," Larry said.

Weaknesses in competing markets like Texas and Colorado have helped, as have high prices. Another big factor is the vast expanse of cheap land here; some as little as $2 an acre. Larry said, in Texas, land is expensive and there's a lot more competition.

In Wyoming, "we're looking at places that aren't so crowded, where there's opportunities to pick up lands at lower prices. It's untouched fields and that's what people are most interested in."

The Trump administration has made more of that cheap land available. Federal agencies like the Bureau of Land Management (BLM) have streamlined the leasing process while multiplying the amount of acreage available.

"I think that makes a big difference here and you're making it easy. It's not like there's a lot of red tape and documents and paperwork to sign," he said.

But all this has been met with fierce resistance from environmental groups.

2018 BLM lease Sales Overlaid on sensitive wildlife areas.
Credit Connie Wilbert, Sierra Club

Connie Wilbert, director of Sierra Club's Wyoming chapter, said the new leasing could undermine years of work protecting sage grouse, mule deer, and pronghorn antelope all of which rely on Wyoming's untouched lands for migration, breeding, and grazing. She pulls out a large map and shows there are new leases right in the state's mule deer migration corridor; the longest in the world.

"If these leases are all developed or even a substantial portion of them are developed it will devastate all of those wildlife values," Wilbert said.

37 percent of the remaining sage grouse population inhabits Wyoming. A recent study found oil and gas development has caused the bird to abandon its lek, or breeding grounds, causing further population declines. From 2007-2013, the study found its numbers had gone down up to 75 percent in the state.

Mule deer and pronghorn also tend to flee from disturbance like drilling or road sounds, causing indirect habitat loss. Development can also inadvertently remove vegetation needed.

The Trump administration says it is taking environmental concerns into account. Other environmental groups have launched legal challenges. One lawsuit was successful against the Bureau of Land Management's shortened leasing process -- nearly reversing it. In the initial announcement of the shortened comment and protest periods, the BLM said effective monitoring and local resource management plans from local offices will help "adequately protect important resource values." The Interior Department itself did not return a request for comment.

Wilbert said the value of public land is being whittled away to just energy development: "I think it's really important to remember these are public lands. They belong to the people of the United States not just in Wyoming, but throughout the whole country."

All these oil and gas leases are a financial boon to the state. So far, this year they've brought in more than $47 million, according the most recent CREG report. More will come once they start producing.

Illustrating the scene Wold sees as we leave the developing well-pad.
Credit Cooper McKim

Back on his well-pad, Peter Wold thinks industry can thrive here without hurting the environment. He points to a nearby meadow, where a herd of pronghorn antelope mix with cattle. There are wind turbines in the background.

"We love this area. And the last thing in the world we want to do is mess it up."

Wold expects to start extracting oil and gas in February, the same month the BLM plans to auction off over 700,000 more acres of deferred public land here.