Signs warn of dangers related to an oil production facility outside Cheyenne. Some Cheyenne-area homeowners are not satisfied with the state's new "setback" rule to buffer nuisances and dangers of oil and gas activities from residential areas. (Photo courtesy of Jill Morrison)

How far is Gov. Matt Mead willing to go to help protect homeowners from oil and gas development? About 150 feet, and no farther, according to some state residents. Not nearly far enough to satisfy landowners who find themselves living next to industrial-sized drilling and hydraulic fracturing activities.

“If the governor thinks 150 feet is going to make a damn bit of difference with a 10-acre pad he’s out of his mind,” Cheyenne area homeowner Wayne Lax told WyoFile.

The Wyoming Oil and Gas Conservation Commission Tuesday unanimously approved an increase in the minimum distance between drilling operations, homes and other occupied structures from 350 feet to 500 feet. It’s a much smaller increase than the 1,320 feet that landowner advocates requested.

The “setback” distance will be measured from the outermost edge of drilling and production facilities rather than from the wellhead, as previously measured. The revised setback rule also requires operators to provide at least 30 days notice to surface owners within 1,000 feet before construction of a well pad — but not before filing an application for permit to drill.

For each drilling location, operators must also submit to the state a plan “to mitigate reasonably foreseeable impacts to the owner(s) of Occupied Structure(s),” according to the new rule. “At minimum, the Owner or Operator shall consider noise, light, dust, orientation of the drilling pad, and traffic in developing its plans.”

The revised rule for oil and gas development in Wyoming is an improvement, landowners and landowner advocates said. But it doesn’t go nearly far enough to assure reasonable protections from the noise, dust, traffic and hazardous emissions that are a part of today’s drilling activities.

Regarding hazardous emissions, the Wyoming Oil and Gas Conservation Commission concluded “that there is no definitive science or data with regard to energy development effects on human health which provides any clear guidance in setting setback requirements.”

The Petroleum Association of Wyoming has praised the setback revision — which was approved in its final form on Tuesday —  as a meaningful step to avoiding conflicts with homeowners and landowners.

“The WOGCC’s proposal to extend the setback from 350 feet to 500 feet doubles the area under the exclusion zone around inhabited structures,” PAW vice president John Robitaille wrote in a March 29 op-ed published in the Casper Star-Tribune. “This is a substantial increase in its own right, but it is also reasonable because it allows surface owners and mineral owners the needed flexibility to protect their property while allowing for development.”

Perhaps doing more harm than good, Gov. Mead and the oil and gas industry portray the new setback rule as a sensible and hard-fought compromise. Landowners involved in the new setback rule don’t see it that way.

“I told them [the oil and gas commission] they are ruining people’s lives,” Lax said. “They’re going to do just what they were going to do from the start and ignore [landowner concerns].”

There are no standards or guidelines within the new requirement for operators to submit a plan to mitigate impacts to nearby landowners.

Landowners may still make their case to the commission for greater setback distances on a case-by-case basis. Conversely, operators may request a variance to the new minimum setback of 500 feet. Landowners may also request specific measures to minimize traffic, noise, light and other nuisances. Yet they must make their case to the Oil and Gas Conservation Commission, which is built around the oil and gas industry with a primary function of resolving disputes among operators to prevent the waste of mineral resources. It is not well-equipped to resolve disputes between landowners and operators.

Nor is the commission much interested in resolving such disputes. Take, for example, Dave Hoffert, who owns a home outside Cheyenne near where several operators are drilling and plan to drill more oil wells. He drove to Casper to testify Tuesday before the 5-member oil and gas commission, which includes Gov. Matt Mead. He’d filed a protest against an application by EOG Resources to cluster more wells inside an existing, approved drilling and spacing unit.

Commission members informed Hoffert that the agency has a very “narrow authority” in addressing his concerns over nuisances from the increased drilling activity in the application avenue pursued by EOG. Hoffert sat alone before the commission, while EOG Resources was represented by an attorney and professional staff.

“I’m a fish out of water here,” he told the commission. “Me and my neighbors didn’t even know there was a well going in. Our issue is — basically it’s a question — why on earth can’t we spread this out to minimize the impact on the area?”

Commission members expressed their sympathy for Hoffert’s position and his concerns, but dismissed his protest.

“Many of these types of issues are better discussed between the company and the individual,” said oil and gas commissioner Tom Drean, who also serves as Wyoming State Geologist.

Who manages for conflict?

Conflict between industry, landowners and residential areas is not only a consideration for the Oil and Gas Commission. It’s a question for multiple state agencies. But none of them are well-equipped to deal with industry-landowner disputes, leaving landowners to pursue their grievances via administrative processes and the courts.

Yet their grievances are often systemic rather than a one-off instance of a single landowner and a single operator not being able to come to terms.

Think back to the coal-bed methane gas boom in the Powder River Basin just 10 years ago. Landowners from Gillette to Wright to Sheridan were caught up in a boom that brought 3,000 new wells per year. They found that some of the 80-plus different operators were less than cooperative when conflicts arose. When they sought help they discovered the state’s authority to oversee the industry was split among several different agencies. They also found a set of state agencies institutionalized around the oil and gas industry.

For example, the Wyoming Department of Environmental Quality has authority to issue permits for produced water that is dumped on the surface, setting parameters for water quality, but not for water quantity. The latter consideration is under the authority of the State Engineer’s Office, which bases its consideration, in part, on whether such discharges fit a “beneficial use” exemption.

In the case of coal-bed methane, and the coal aquifer water that is produced in the process, the State Engineer declared that the production of coal-bed methane gas and the resulting surface discharge of coal aquifer water is a beneficial use of the water. Therefore, for years, the agency placed no cap on the volume of coal-bed water surface discharges. Some adjacent and downstream landowners were inundated with large volumes of highly saline water, which resulted in salt-loading in ephemeral draws — prime grazing areas in the arid high plains.

Wyoming residents, with the help of some landowner advocacy groups, successfully petitioned the citizen-appointed Environmental Quality Council to clarify the beneficial use doctrine. The EQC, and stakeholders from all sides, wrestled with a proposed rule in the mid-2000s. The effort took several years, dozens of meetings and hearings and compromises, and ultimately resulted in a revision of the beneficial use doctrine. Then Gov. Dave Freudenthal immediately and unceremoniously vetoed it, demoralizing landowners’ trust in the citizen-rulemaking process.

Sidenote: The State Engineer’s Office eventually was forced to place a water-to-gas ratio cap on coal-bed methane water discharges after it was discovered that many wells produced only water and no gas — sometimes for years.

Who looks out for landowners?

The state’s track record in not satisfying landowner worries about mineral development continues to breed cynicism in today’s effort.

“There are health concerns. I have concerns for my family,” said Brad Brooks who lives just outside Cheyenne. “I took this to the governor’s office. His assistant already had his mind made up; they were pro oil and gas production, and said this is an issue between you and your adjacent homeowner.”

When the Powder River Basin Resource Council petitioned the Oil and Gas Conservation Commission in 2013 to revise its rules for setbacks, flaring and other considerations, the citizens’ petition was flatly rejected. Gov. Mead said in 2013 it was more appropriate that any rule change proposal be brought by the state, not by citizens.

Eventually, the state did set into motion its own proposal and included input from industry, landowners and others. But this week’s outcome suggests the state has a long way to go in providing the responsiveness that residents expect.

“There’s really just no way for people to be heard in this state,” said Lax, who is a member of the Cheyenne Area Landowners Coalition — an affiliate of the Powder River Basin Resource Council. “I’m pretty disappointed with this whole process, but I’m not giving up.”

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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