Bill to raise seismic testing bond to $5k goes to committee

This Thursday the Wyoming House Agriculture Committee will consider a bill to provide landowners with more protection from seismic companies that trespass or damage private land. The measure previously passed the Senate.

Senator Bruce Burns (R-Sheridan) sponsored Senate File 136 – Seismic Exploration-3 after the House Judiciary shot down an interim bill on the same topic.

Specifically, SF 136 would raise the damage bond for seismic companies from $2,000 to $5,000 for the first 1,000 acres controlled by one owner.

Companies would post another $1,000 bond for each additional 1,000 acres held by the same owner. Parcels under 40 acres in size held by different owners could be pooled under a $5,000 bond. The bonds are posted to the Wyoming Oil and Gas Conservation Commission.

Bruce Hinchey, president of the Petroleum Association of Wyoming, said the bill isn’t necessary because companies already post bonds that cover their entire project. The project bonds have ranged from $25,000 to $300,000.

Earlier this week Hinchey proposed an amendment to allow companies to pool all parcels less than 1,000 acres in size under a single $5,000 bond. This would preclude companies from having to post a $5,000 bond for every parcel between 40 acres and 1,000 acres. The committee did not indicate whether they would take on Hinchey’s amendment.

The bill would also require companies to work under a valid mineral lease or reach a surface use agreement with the landowner.

This provision could stop speculative seismic testing, where companies survey geologic formations in hopes of later selling the data to an oil and gas developer. The Powder River Basin Resource Council supports the legislation.

The House Agriculture Committee will hear more testimony on Senate File 136 on Thursday morning. If the committee approves the bill it will pass it out for three hearings on the House floor.

A similar bill to raise the damage bond to $10,000 failed in the 2011 legislative session, as reported by WyoFile. Sen. John Schiffer (R-Kaycee) sponsored that measure.

The renewed effort at seismic bond legislation comes on the heels of surveys that covered large swaths of the Niobrara oil play in eastern Wyoming. For more on Niobrara seismic testing, read this WyoFile feature. During the play some seismic companies accessed private property under the $2,000 damage bond filed with the state. The most speculative companies used the $2,000 bond to force access onto private land without first reaching a surface use agreement with landowners, or demonstrating that they worked on behalf of a mineral leaseholder.

Since 2010 the Powder River Basin Resource Council has argued that the $2,000 damage bond could not begin to cover the cost of ruts and fence damage left behind by some seismic crews.

The group noted that the relatively low price of the bond encouraged companies not to reach surface use agreements, which can cost $5 to $10 an acre on ranches that contain thousands of acres.

Update: The House Agriculture committee passed Senate File 136 on Thursday, February 21st with a vote of 7 in favor and 2 opposed. The bill had no amendments. If the bill does not make it off General File by February 22 it will die.

— Gregory Nickerson is the government and policy reporter for WyoFile. He writes the Capitol Beat blog. Contact him at greg@wyofile.com.

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