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Oil and gas operators flaring more gas, paying no taxes or royalties

Willow Belden

Oil development in the state is bringing up natural gas along with the oil, but some of the gas is getting burned off in flares and the state is missing out on taxes and royalty payments. The reason the gas is getting flared is that there are not enough pipelines in place to connect new wells to markets.

The President of the Wyoming Petroleum Association, Bruce Hinchey, says it doesn’t always make sense to build new pipelines for the relatively small quantities of gas coming up.

“Let’s say the pipeline needs to be put in to go to a pipeline where they can sell it and be able to sell it to market. It could be 5 miles, it could 10 miles, it could be 20 miles, it could be 50 miles away from the pipeline where they can sell it and be able to sell it to market. So you have to look at the economics of how much does it cost to build that pipeline so that you can sell the product,” says Hinchey.

The practice affects state, federal, and private lands. Hinchey says producers would need many  more wells in place to make new gas pipelines worthwhile. But the person responsible for maximizing state profits, Director of the Office of State Lands and Investments, Ryan Lance, says that as energy development moves from the exploration to the production phase, the issue needs to be addressed more aggressively. The Legislative Revenue Committee will be looking at the question of tax exemptions for flared gas in the interim.    

Irina Zhorov is a reporter for Wyoming Public Radio. She earned her BA from the University of Pennsylvania and an MFA from the University of Wyoming. In between, she worked as a photographer and writer for Philadelphia-area and national publications. Her professional interests revolve around environmental and energy reporting and she's reported on mining issues from Wyoming, Mexico, and Bolivia. She's been supported by the Dick and Lynn Cheney Grant for International Study, the Eleanor K. Kambouris Grant, and the Social Justice Research Center Research Grant for her work on Bolivian mining and Uzbek alpinism. Her work has appeared on Voice of America, National Native News, and in Indian Country Today, among other publications.
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