Energy Industry Critical of State’s Royalty Fee Hike

CHEYENNE, Wyo. — Oil and gas representatives are voicing criticism about the first proposed changes to Wyoming’s oil and gas leasing contract in nearly three decades, including a provision increasing royalties paid to the state.

The Office of State Lands and Investments has proposed rewriting almost the entire standard oil and gas leasing contract. The most controversial proposal would raise the maximum amount for state royalties from 16 2/3 percent to 18 3/4 percent.

The royalty hike will bring Wyoming in line with royalty rates in other states, State Lands and Investments assistant director Harold Kemp told the Casper Star-Tribune.

Feds Warn Pavillon Residents About Water

The federal government is warning residents in a small Wyoming town with extensive natural gas development not to drink their water, and to use fans and ventilation when showering or washing clothes in order to avoid the risk of an explosion.

The announcement accompanied results from a second round of testing and analysis in the town of Pavillion by Superfund investigators for the Environmental Protection Agency. Researchers found benzene, metals, naphthalene, phenols and methane in wells and in groundwater. They also confirmed the presence of other compounds that they had tentatively identified last summer and that may be linked to drilling activities.

“Last week it became clear to us that the information that we had gathered” “was going to potentially result in a hazard — result in a recommendation to some of you that you not continue to drink your water,” Martin Hestmark, deputy assistant regional administrator for ecosystems protection and remediation with the EPA in Denver, told a crowd of about 100 gathered at a community center in Pavillion Tuesday night. “We understand the gravity of that.”

Wyoming Seeks Buyers for Abandoned Coal-Bed Methane Wells

CASPER — The Wyoming Office of State Lands and Investments is attempting to locate buyers for dozens of abandoned gas wells on state lands.

Under a sealed competitive bid process, Wyoming is now offering oil and gas lease rights on 24 state parcels in Sheridan County. Each parcel includes one to 16 coal-bed methane wells, and each lease was either defaulted on or was canceled by the state for various reasons.

According to Harold Kemp of the state’s mineral leasing and royalty compliance division, the wells were abandoned as a result of operational inefficiencies or loss of investment income. Kemp said a handful of companies had expressed interest in the Sheridan County
 

State’s Workplace Fatality Rate Now Third in Nation

CHEYENNE — Wyoming no longer is the nation’s deadliest place to work, a dubious distinction that now belongs to Montana.

The number of workers killed on the job in Montana increased from 40 in 2008 to 50 in 2009, according to figures released Thursday by the Bureau of Labor Statistics.

That’s up 25 percent for a rate of one death per 19,500 people of all ages, more than three-and-a-half times the U.S. average of one per 70,739. In 2008, Montana ranked fourth for workplace deaths per capita.

In Wyoming, the number of workplace deaths fell from 33 to 19, a decline of more than one-third that resulted mainly from a slowdown in the state’s gas industry.