Wyoming Rejects Millions in Federal Funds for Voluntary Shut Down of Certain Oil and Gas Wells

By Better Today On Oct 9, 2023

TL/DR –

Wyoming is not applying for up to $5 million offered by the federal program, Mitigating Emissions from Marginal Conventional Wells, that aims to reduce harmful emissions and idle or low producing oil and gas wells. The state’s Governor, Mark Gordon, feels that the program is an attack on the state’s oil and gas industry which he claims provides 10% of the state’s total oil production, or about $265 million in annual revenue. Katherine Stahl, from the Powder River Basin Resource Council, suggests that the funding could be used to support operators planning to shut down low or non-producing wells voluntarily and disagrees with the governor’s interpretation.

Wyoming Misses out on Federal Funding for Low Producing Oil and Gas Wells

Wyoming is overlooking millions in federal funding that could aid in closing underproductive oil and gas wells. The state qualifies for up to $5 million from the federal program, Mitigating Emissions from Marginal Conventional Wells, a segment of the Inflation Reduction Act. It is aimed at non-federal land oil and gas wells that are either idle or yield less than 15 barrels of oil daily.

Despite the funds’ potential to decrease harmful emissions and support well closures, Wyoming’s Governor, Mark Gordon, rejected the application. He saw it as an assault on Wyoming’s oil and gas sector, contributing about 10% of the state’s total oil production, equating to $265 million in annual revenue.

Gordon’s press release claims that the D.C. bureaucrats’ approach neglects the industry’s economic significance to Wyoming and impacts hundreds of small businesses and revenue generation for schools, the state, and local government.

Katherine Stahl, a community organizer for the Powder River Basin Resource Council (PRBRC), critiqued the press release as misleading. She clarified that accepting the funding does not necessitate shutting down wells. The federal document expounds that the grant’s use is voluntary and primarily intended for operators planning to shut down a low-yielding or non-producing well.

Ryan McConnaughey, director of communications for the Petroleum Association of Wyoming, supported Gordon’s decision. He reasoned that the lack of precise information about how the money should be spent could potentially harm small operators.

Despite Wyoming having an industry-funded program for closing idle and abandoned wells, Stahl insists that the federal funds could have supplemented available resources for willing operators. The application deadline for the grant was October 10.