Gov. Mark Gordon has added $12 million to an oil and gas COVID-19 relief fund, bringing the total federal CARES Act funding Wyoming has funneled into its Energy Rebound Program to $42 million.

Gordon announced the additional allocation Tuesday, noting that despite improving pandemic conditions and rebounding demand for oil and gas nationwide, the industry’s recovery in Wyoming is much slower.

“The Energy Rebound Program successfully provided opportunities for oil and gas industry employees who lost jobs when drilling ceased last year,” Gordon said in a press statement. “This program will continue to provide economic benefits to this important industry, their workforce and the entire state of Wyoming.”

Oil and gas companies have from June 15-25 to apply for additional allocations under the program. Each qualifying project is capped at $500,000.

Gordon initially launched the program in November 2020 with a $15 million allocation from Wyoming’s $1.25 billion share of the federal relief package. The Wyoming Energy Rebound Program was intended to keep oil and gas employees in the state working as pressures from the pandemic and economic fallout sidelined consumer demand and production activity. 

Gov. Mark Gordon testifies before the Senate Committee on Energy and Natural Resources in Washington D.C. in April 2021.

Citing a great response to the program, the governor quickly doubled the Energy Rebound fund to $30 million.

Most of that money has already been allocated among 67 producers for three main qualifying activities: completing new drilling that had been initiated but delayed due to the pandemic shutdown; retooling existing wells to boost or extend productivity; and plugging old wells no longer in production. Some of the top beneficiaries of the Energy Rebound Program so far include Devon Energy Production Co. ($5.5 million), Jonah Energy LLC ($2.5 million) and Samson Resources Co. LLC ($1.9 million), according to state accounting data.

The continued aid is especially important in Wyoming, Petroleum Association of Wyoming President Pete Obermueller said in the governor’s press release.

“As energy demand continues to increase, private-land production states have seen a quicker rebound, one that has yet to reach Wyoming’s federally-owned resources,” Obermueller said. “Given the success of the inaugural Energy Rebound Program — a jobs program at its core — Governor Gordon’s decision to initiate a [another] round makes perfect sense.”

The industry was already faltering in the months leading up to the March 2020 pandemic shutdown. U.S. shale gas producers, wracked with debt, were suffering in the financial markets, while oil producers struggled due to  a price war between Russia and Saudi Arabia. The shutdown delivered another devastating blow by sapping demand in historic fashion, temporarily plunging the price per barrel to below $0 and, for a brief period in the summer of 2020, driving Wyoming’s rig count to zero for the first time in the state’s history.

Best use of COVID relief dollars?

The Energy Rebound Program, so far, has enabled oil and gas companies to support “100 service companies from 14 Wyoming towns to complete their work,” thousands of jobs and approximately $150 million in new production, Obermueller said 

Those are “praiseworthy” outcomes for Wyoming, but the dollar amounts and scope of the Energy Rebound Program seem to extend beyond the spirit of the CARES Act, said Bob LeResche, who serves on the boards of the Powder River Basin Resource Council and Western Organization of Resource Councils.

“CARES Act funds were to be directed to amelioration of direct COVID impacts on workers, families, government, small business and industry,” LeResche said. “They were not meant to enhance profits or provide infrastructure for future private benefit.”

The volatile nature of oil and gas markets, as well as the industry’s mounting challenges to reduce emissions to address the climate crisis, existed long before the pandemic and still remain, LeResche said. While there are direct economic benefits of the Energy Rebound Program to Wyoming workers and communities, it also serves as a “gift” to private companies, LeResche said.

Plugging and cleaning up unproductive wells, for example, has always been a cost of doing business that should not fall on taxpayers. “Most vexing is that some of these millions have been used to plug and abandon wells, relieving the grantees of their obligation to pay for this work,” LeResche said.

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CARES Act relief dollars directed to the oil and gas industry serve the same purpose as any business or industry receiving the aid, PAW Communications Director Ryan McConnaughey said. 

“Just as demand for hotel rooms and restaurant reservations plummeted due to COVID, so too did demand for oil and gas,” McConnaughey said. “CARES Act funds are a government response to that reality for all businesses. In contrast to other CARES Act programs that paid for losses with little to no strings attached, [Energy Rebound Program] requires actual projects in Wyoming that have a significant multiplier effect for Wyoming’s revenue and workforce.”

WyoFile used state reporting data from the Energy Rebound Program to compile its top 10 recipients:

 

° Devon Energy Production Company

Total paid: $5,530,085

Completion of a well drilled: 10

Recompletion/workover: 0

Plugging/abandoning: 5

 

° Jonah Energy LLC

Total paid: $2,525,000

Completion of a well drilled: 2

Recompletion/workover: 5

Plugging/abandoning: 5

 

° Samson Resources Company LLC

Total paid: $1,905,000

Completion of a well drilled: 2

Recompletion/workover: 5

Plugging/abandoning: 5

 

° Occidental Petroleum Corporation

Total paid: $1,655,108

Completion of a well drilled: 2

Recompletion/workover: 2

Plugging/abandoning: 0

 

° Oildigger Resources Fund I LLC

Total paid: $1,500,000

Completion of a well drilled: 0

Recompletion/workover: 3

Plugging/abandoning: 0

 

° Titan Exploration LLC

Total paid: $1,139,455

Completion of a well drilled: 0

Recompletion/workover: 5

Plugging/abandoning: 0

 

° Ballard Petroleum Holdings LLC

Total paid: $1,060,483

Completion of a well drilled: 1

Recompletion/workover: 3

Plugging/abandoning: 2

 

° Aethon Energy Operating LLC

Total paid: $715,000

Completion of a well drilled: 0

Recompletion/workover: 5

Plugging/abandoning: 2

 

° Kentex Worland LLC

Total paid: $698,237

Completion of a well drilled: 0

Recompletion/workover: 5

Plugging/abandoning: 0

 

° Contango Resources Inc. 

Total paid: $622,729

Completion of a well drilled: 0

Recompletion/workover: 5

Plugging/abandoning: 4

 

Other top recipients;

Loil Oil LLC: $505,000

Southwestern Production Corp: $500,000

Matrix Production Company: $500,000

Hudson Group LLC: $500,000

Helena Resources Inc.: $500,000

Denbury Onshore LLC: $470,796

RIM Operating Inc.: $410,283

Dustin Bleizeffer

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 22 years as a statewide reporter and editor primarily...

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  1. Well…I’m sure I’m am in the minority here, but…I realize Wyoming is an oil,gas,coal state..but times are a changing..let’s stop destroying mother earth and take advantage of the things already provided for us..Wind and Solar..we have plenty of both. Do we have to be last in this progressive movement? Let’s get back to the roots of small town businesses and working together…I love Wyoming.

  2. Why is it that Governor Gordon keeps throwing money to the energy sector? Where does that money go? Does it stay in the state or is it sent out of state? You know who could use 42 million dollars? Wyoming’s cities and towns. Look around your Main Street. See anything that needs repaired? Want to put people to work? Invest in our communities.

  3. I’m not sure I understand why our state keeps bending over to assist this dying industry. I question how much of this aid package, and the many others these corporations receive, will actually find it to the workers pocketbooks. It seems the bulk of these benefits traditionally end up in CEO bonus payments and corporation payouts – and the state is still left holding the empty well hole. It seems there are so many other vital needs in our state; health care, state infrastructure, and small business that are truly in need. Yet we continue to divert limited funds and tax breaks to an industry that is on its way out due to their own inefficiency and lack of progressive planning.
    Only thing I can conclude is that the wealthy always beget the wealthy and they all laugh on their way to the bank.

  4. Meanwhile, Wyoming small businesses have had their unemployment insurance premiums raised by a factor of 10. Why can’t part of the millions going to oil and gas go to help the already-struggling small businesses throughout the state pay their skyrocketing premiums. Wyoming’s priorities have gone to hell.

  5. Oil and gas has ALWAYS been heavily subsidized. Isn’t it wonderful that the republican governor of Wyoming is now going to increase it while at the same time assistance for citizens and seniors are cut, cut, cut.

    On a related note Wyoming republicans hate the very thought of wind and solar energy in Wyoming while at the same time chomping at the bit to subsidize to the tune on hundreds of millions the nuclear power fantasy in our state. That nuclear plant will NEVER be built in Wyoming but meanwhile every citizen will have to pay the costs of the fevered dream of a minority in the legislature and the governor, whoever that will be next.

  6. Who doesn’t get the multiplier effect by now?. Every dollar in resource production/development that goes to the state is multiplied 3x in comparison to what I (and most of us) pay for services (roads, education, habitat protection, etc). For this I am grateful, but lets face it – this is not sustainable. Working together, we can turn this around. First, WY must have an income tax, graduated and (mostly) inflicted upon those who have sought refuge in WY as a tax haven (sorry y’all). Second, we need to abandon all of the tax credits (150+). And third, we need to learn to do as much with less, the new paradigm. I love WY and welcome all that want to love it too. But let’s all pay our share, our way forward.