The state’s efforts to acquire federal lands in the fossil-fuel-rich Powder River Basin continue, despite a failed attempt to swap the state-owned Kelly Parcel in Teton County for such property.
Instead of a swap, the State Board of Land Commissioners, made up of the state’s top five elected officials, narrowly approved an agreement last week to sell the 640-acre Kelly tract to the federal government for $100 million so it can be folded into Grand Teton National Park. Three commissioners — Gov. Mark Gordon, Treasurer Curt Meier and Auditor Kristi Racines — declined proposed amendments to include a potential trade for federal Powder River Basin properties.
Superintendent of Public Instruction Megan Degenfelder and Secretary of State Chuck Gray voted against the sale, in favor of a swap for federal minerals in the Power River Basin.
However, the same five elected officials also serve as the State Loans and Investment Board. That body, on the same day, voted unanimously to continue negotiations with the Bureau of Land Management to either buy federal Powder River Basin properties using proceeds from previous state land sales or consider a potential swap with other state-owned lands.
The state and the federal governments have vastly different approaches to public lands management, at least in part because of Wyoming’s constitutional mandate to prioritize the revenue-earning potential of its 3.4 million acres of “school trust lands” in support of K-12 schools.
Proponents of the Kelly Parcel sale, which has been in the works for some 15 years, champion the move, primarily, to avoid state-approved development of the property to fulfill its duty to maximize revenue from school trust lands. By selling the property, the state will instead earn an annual $6.4 million from the proceeds of the $100 million sale, according to Treasurer Meier — both fulfilling the mandate to maximize revenue, while preserving the wild and scenic qualities of the park, which is itself a cash cow for the state.
Proponents also rallied behind the sale for the tract’s uncalculable value in becoming a part of Grand Teton National Park where the landscape is part of a rare, scenic and protected ecosystem that supports recreation, wildlife and billions of dollars in tourism — a value best realized under the ownership of the Department of Interior, they say.
Though not part of the pending Kelly Parcel sale, there are also valuable resources in the arid plains of the Powder River Basin in northeast Wyoming, albeit subterranean — coal, oil, natural gas and uranium ore. A lot of those minerals are managed by the U.S. Bureau of Land Management.
There’s an old adage that goes something like this: The beauty of western Wyoming is above ground, while the beauty of eastern Wyoming is underground.
“They’re both very valuable,” Degenfelder told WyoFile.
Coveting the Powder River Basin
After the State Board of Land Commissioners tabled the Kelly Parcel deal last year, Degenfelder coordinated with Gordon to assemble a task force to examine prized federal tracts in the Powder River Basin — primarily to exploit oil.
The group includes Degenfelder, Auditor Racines, Gordon’s Policy Director Randall Luthi and Wyoming Office of State Lands and Investments Interim Director Jason Crowder. They work closely with longtime Wyoming oil and gas professionals Andrew Finley and his former business partner Jimmy Goolsby, who serves on the Wyoming Oil and Gas Conservation Commission, according to Degenfelder.
Despite being best known for its massive trove of coal deposits, which also sparked a coalbed methane gas boom in 2000s, the task force is focused on the continuing oil play in the basin, Degenfelder said. The Powder River Basin is the state’s largest source of oil production, accounting for more than 60% of the state’s crude output, according to the Wyoming State Geological Survey.
There’s “huge” potential to boost oil production in the Powder River Basin even further, according to Goolsby. It’s an oil play that will last for many years, he said, and generate a lot of tax revenue for the state. In fact, producers pushed for a 5,000-well program with the U.S. Bureau of Land Management in the region. The development was approved but still faces legal challenges. Despite the court battles, oil and gas giant Anschutz Exploration Corp. recently inked a deal to buy out Powder River Basin oil and gas interests from two other top producers in the region.
But for all the oil potential in the Powder River Basin, the region’s biggest hurdle is the fact that the federal government manages a lot of the mineral estate on behalf of the entire American public — not just Wyoming. Today’s conventional production method relies on horizontal drilling, reaching two miles or more from a drill site. Those logistics require putting together contiguous mineral lease holdings that inevitably involve some portion of BLM-administered property. That means extra years of pre-operational surveys and an increasingly expensive and complex set of federal hoops before a drillbit can chew dirt.
“This is probably the most lightly tapped potential in the United States,” Goolsby told WyoFile. “But I do know that companies have left the Powder River Basin just because they don’t want to deal with the feds.”
If the state can acquire federal property and piece together contiguous 1,280-acre tracts, operators would save money and more quickly boost oil production under the state’s permitting programs, according to Goolsby.
“What it will do is, acreage that’s worth, say X-number of dollars, will be worth X-plus dollars if there’s no interference with federal land,” Goolsby said. Also, he added, the taxes and royalties earned from the production would go directly toward Wyoming school funding.
So far, the group has identified about 100,000 acres of yet-to-be-drilled BLM-administered lands in the Powder River Basin, mostly scattered from southern Campbell County and throughout Converse County, according to Degenfelder. The strategy has been to begin with federal property already on the BLM’s potential “disposal” list to piece together contiguous drilling operations, then negotiate with the federal government for some properties that are not on the disposal list.
“That’s been the methodology that we’ve used — trying to have a good-faith effort to come together with BLM on what they’re already getting ready to dispose, but also recognizing and telling them, ‘Look, we need full spacing units to make this a reasonable deal,'” Degenfelder said.
The process, even if a proposed purchase or land-swap deal doesn’t come to fruition, will be public, Degenfelder said. The group has made some maps available and is coordinating with the BLM to develop more maps and other information available to the public.
“It’s not like we’re hiding any secrets,” Degenfelder said.
Energy connections
Degenfelder, who leads the task force, is no stranger to the Powder River Basin or the state’s coal, oil and natural gas industries. She’s also aware of concerns among the public about a potential conflict of interest over her family’s role in the state’s oil and gas industry and her history of employment with energy companies.
“It’s a bit offensive and really disappointing,” Degenfelder told WyoFIle, “because I’m not looking to have any conflicts of interest.”
A sixth-generation Wyomingite, she learned a lot about the oil and gas business from her father Steven Degenfelder, who serves as land manager for Casper-based Kirkwood Oil and Gas. After earning her bachelor’s degree at the University of Wyoming, she earned a master’s degree in Beijing, China, with a thesis “focusing on the elasticity of demand between coal and natural gas,” according to her most recent bio.
She served as a government and regulatory affairs manager for Cloud Peak Energy, a former coal operator in the basin, from 2014 to 2017 and was listed as a registered lobbyist for the company. The company filed for bankruptcy and sold to Navajo Transitional Energy Co. in 2019. She also served as government and regulatory affairs manager for Morningstar Partners Oil and Gas for a short period after leaving Cloud Peak, according to the nonprofit, nonpartisan government transparency group Open The Books.
Degenfelder is proud of her prior work in energy, she said, and has laid out her cards in her biographies and her state-required conflict of interest disclosures. She noted that when an issue came before the State Board of Land Commissioners involving Kirkwood Oil and Gas — where her father works — she recused herself.
“There is no conflict of interest,” Degenfelder said, adding “I don’t think that’s fair. [My father] hasn’t seen a single map or a single nothing.
“There’s been no involvement from my family or Kirkwood or anything to that extent,” she added.
For his part, Goolsby said he sold his interest in Goolsby, Finley and Associates LLC years ago, and would not participate in the task force’s efforts if it was anything other than legitimate and transparent.
“I would be extremely disappointed if that wasn’t the case,” he said.
As someone who has taught ethics and understands the importance of maintaining public trust, I find it deeply concerning that both Megan Degenfelder and Jimmy Goolsby are serving on this task force. While Degenfelder may argue that her past affiliations and her family’s connections to the oil and gas industry do not present a conflict of interest, the perception of impartiality is critical in these situations. Even if there is no technical violation of conflict-of-interest rules, the appearance of a conflict can undermine public confidence in the task force’s decisions.
For Goolsby, the situation is even more troubling. His longstanding ties to the industry, despite claims of divestment, raise significant questions about his ability to serve objectively. Wyoming’s approach to public land management should prioritize transparency and integrity, particularly when the stakes involve federal land acquisitions that impact the state’s energy and environmental future.
It is in the best interest of Wyoming’s citizens and government to avoid even the smallest hint of impropriety. Allowing individuals with such deep connections to the oil and gas industry to lead or heavily influence these efforts compromises the public trust and calls into question the legitimacy of the task force’s outcomes.
The state should immediately re-evaluate the composition of this task force to ensure that its members can operate without any perception of bias or conflict, no matter how “legitimate and transparent” the process claims to be. Wyoming deserves nothing less.
The feds own over half of California (you know, that state that lent Wyo Josh Allen for a couple of years before he moved to New York) and that didn’t stop CA from building an economy larger than Japan’s. – – – So the feds ain’t holding Wyo back. Wyoming gladly holds itself back by sticking with the same old playbook.
Oil/gas is still the life blood of society. Now oil gas industry is starting to recover rare minerals from its produced water. Smackover oil producers are now recovering them. Actually Bromine has been recovered for 60 years from the water. States are now rewriting or writing royalties structure. None exsisted till recently. Producers could not take the minerals with paying royalties until now. The left needs to get realistic on things.
In order for an acquisition/swap to work there are a few basic considerations which the State of Wyoming must recognize, they being:
1.) The BLM/USFS is interested in blocking up parcels of large acreage which are predominately all Federal ownership; that is eliminating State of Wyoming inholdings.
2.) The BLM/USFS is interested in acquiring property usually via swaps which has extraordinary wildlife, archaeological, paleontological, historical and recreational values. Examples are the Marton Ranch purchase and the Whoopup Canyon petroglyphs sites which they acquired.
3.) The BLM/USFS is very interested in acquiring acreage which has water the reason being that the homesteaders took most of the watered land and left the BLM/USFS with the dry land. Please note that the Marton Ranch purchase included 8.2 miles of North Platte River frontage and also blocked up even more Federal acreage for public access.
Bottom line is that Wyoming will be more successful acquiring acreage in the PRB if they open the conversation with ” what are you interested in?”. Obviously the Feds are very happy with the acquisition of the Moose section which demonstrates that Wyoming has been willing to convey parcels of land to the Feds which fits into their management aspirations. Old fashion friendly negotiations with good intent are a must. However, the Gordon administration made huge mistakes opposing the Marton Ranch purchase and attempting to auction off the Moose section. I wonder if the current administration in Cheyenne is capable of working a deal with the Feds – their track record is unimpressive – and if they sue the Feds in court over the Rock Springs RMP that will throw a bucket of cold water on the possibility of acquiring land in the PRB. Maybe the new administration in Washington will be easier to negotiate with but its too early to tell, and our Congressional delegates may be able to pursue a trade/sale on equitable terms but it would need to have major concessions for the other states reps to go along with it.
Why bye it wait a little bit andT-rump will give it away to Wyo.
Superintendent Degenfelder should “stay in her lane”. The purpose of her elected position is to oversee and facilitate Wyoming Public School EDUCATION. She is not the Wyoming State “Landman”, to facilitate oil and gas leasing and development. To my knowledge, that position doesn’t exist. If that is her interest, she should resign her public position and join the private sector. Mr. Goolsby is a member of the Wyoming Oil and Gas Commission, the regulatory oversight authority of the industry in Wyoming. His role is that of a regulator, not that of a “deal maker” to put a play together for the industry. Given their positions in Wyoming State Government, and their past and ongoing ties to active Oil and Gas companies, their involvement is not only inappropriate, but is the very definition of conflict of interest. If this kind of “deal” is of interest to the Oil Companies, then it is incumbent on the industry to bring forth a workable, proposal to both the BLM and State Government. The issues of mineral rights, surface rights, split estates, lease stipulations, pooling, unitization, etc., etc., are incredibly complicated and are loaded with problems and potential pitfalls. The Wyoming Superintendent of Public Instruction shouldn’t be involved. Stick to educating Wyoming kids.
It appears to me that Superintendant Degenfelder may have a conflict of interest in these matters of oil and gas leasing and land transfers involving the Office of State Lands and Investments, the State Board of Land Commissioners, and the Bureau of Land Management. She should recuse herself from further negotiations regarding state acquisition of federal lands and minerals. One has to wonder what influence her father has in her decisions as a member of the State Board of Land Commissioners as Mr. Degenfelder is the Land Manager for Casper based Kirkwood Oil and Gas Company.
I strongly oppose any sale of federal surface or mineral rights to the State of Wyoming or anyone else. I would consider fair trade proposals as long as it resulted in an increase of federal surface ownership…especially if that increase enhanced recreational access.
The Powder River area of proposed development isn’t an area that has large recreational value. I would agree that I don’t want to see an area like the Thunderbasin Grassland overun with development but that can be overcome with active management. With that said, I am very pleased to see the Kelly parcel passed along to the Feds and believe that is good outcome.
The difficult part of Federal ownership in the PRB, is much of the federal mineral ownersip is under private surface ownership. There is no public recreation value to that Federal ownership. Considerable roadblocks are put in place by overly bureaucratic procedures to the Federal mineral estate. Some of these roadblocks aren’t even there to conserve the integrity of the environment/mineral value. They are simply there to hinder the process.
Many leaders in Wyoming are overly zealous to develop to secure more State funds. I believe it could be tamed and appropriate measures put in place to ensure minimal surface footprint in development plans. The Feds wield their power like petulant children (Many state leaders aren’t much better), and I am hestiant to give them more control over our State.