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Setback Rule Gets Mixed Reviews

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The Wyoming Oil and Gas Conservation Commission introduced a rule this week designed to head off conflict between landowners and companies as drilling activity moves into populated areas of the state. But so far, reaction to the proposal has been less-than-positive. Wyoming Public Radio’s energy reporter, Stephanie Joyce, joins Bob Beck to talk about what’s been proposed and why landowners aren’t happy with it.

Bob Beck: At the center of this debate are something called “setbacks” – what is a setback and why is it so important?

Stephanie Joyce: Distance between wells and houses, schools, hospitals etc… The state’s current setback rule is more than 40 years old and it says wells have to be 350 feet from “occupied structure” – that’s about the length of a football field. Pretty much everyone agrees that distance no longer makes sense. Back when the rule was written, all wells were vertical and most drilling happened in rural areas of the state, far away from people and houses. Today, with horizontal drilling and hydraulic fracturing or fracking, development is happening in populated areas. Anyone who’s driven in Colorado recently knows what I’m talking about. A few weeks ago, I drove past a subdivision down there and there was a pumpjack in front of a house and a drilling rig behind it. That’s not happening in Wyoming… yet… but there’s definitely increasing interest in Laramie County and up in the Powder River Basin. So, I think the Commission is trying to get out ahead of that with these proposed rules.

Beck: And so these rules propose increasing the setback distance – what are the details? Joyce: So, the Oil and Gas Commission released the proposed rules at their meeting on Tuesday. The full text is three pages long and anyone who wants to read the full version can check them out at our website, wyomingpublicmedia.org… but to summarize: the new setback would be 500 feet. That’s less than the 750 feet that the Commission’s staff had originally proposed. But there are also some additional things that weren’t in the draft rules, which are a pretty big deal. The first is that companies would have to notify landowners living within 1000 feet of a well pad of their drilling plans between 30 and 180 days before drilling starts. The second is that companies have to submit a mitigation plan to the Oil and Gas Supervisor detailing how they’re going to minimize impacts on neighbors. They wouldn’t be able to start drilling until that plan is approved – so depending on how strict the Supervisor decided to be, that could be huge.

Beck: The landowners who originally petitioned for the Commission to the setbacks – what do they think about it?

Joyce: In short – they aren’t thrilled. The subject line of press release from the Powder River Basin Resource Council said landowners are “outraged.” I spoke with Jill Morrison, who works for the group after the meeting and she basically said they feel like the Commission threw them under the bus.

The Powder River Basin Resource Council and several other landowner groups had proposed a quarter mile setback – so almost three times the distance the Commission decided to throw their weight behind. And in the group’s opinion, the notification and mitigation requirements are useless because it of the “between 180 and 30 days” beforehand clause. Thirty days before a company starts drilling doesn’t give a lot of time for negotiations over where to put a well pad or even for things like building sound barriers and flare covers.

Beck: What did the Commissioners have to say about the assessment that the notification and mitigation requirements are useless?

Joyce: Obviously, they disagree. I spoke with two commissioners – Governor Matt Mead and Oil and Gas Supervisor Mark Watson. Both emphasized that this is a huge improvement over the existing rules and said that the requirements will bring companies to the table with landowners. I asked Watson why the Commission decided to go with the 500 foot setback instead of staff’s proposal for a 750 foot setback and he said it was because of the issue of waste. Basically, the Conservation Commission is supposed to maximize recovery of the oil and gas… and they say a larger setback would be a problem for getting all of the mineral out of the ground. But that’s hardly what landowners want to hear. In the Powder River Basin Resource Council press release, Teresa Massey, who’s a Cheyenne landowner, is quoted challenging the Commissioners to live within 500 feet of a well. So I asked Governor Mead if he would live within 500 feet of a well…

“Yeah, well, if I had a well out there… I mean, but this is one of the reasons we want to look at it. And the Powder River I guess would not want to do anything.”

So obviously some disagreement there over whether the proposal is good enough.

Beck: But the proposal could still change, right? It’s out for public comment?

Joyce: Yes – and landowner groups have said they’re going to organize and push for changes to the proposal. A landowner I spoke with earlier this week said he really hopes that regardless of the setback distance they come up with, that this makes oil and gas companies more aware of the need to talk to landowners… and that Wyoming can be a leader in showing how oil and gas development can co-exist with people – which is obviously something everyone is striving for.

Beck: Thank you, Stephanie.

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