American Oil and Gas Reporter - August 2021 - 31

ConventionSec tion: Petroleum Association of Wyoming
PAW Sees Bright Future
For Wyoming's Oil Workers
By Del Torkelson
CHEYENNE, WY.-As he considers
the state's oil and gas industry, Petroleum
Association of Wyoming Chairman Joe
Milczewksi touts a resurgence.
" It is a Wyoming comeback, " characterizes
Milczewski, senior director of
government affairs for Occidental Petroleum
Corp. in Denver. " We went through
a tough time and came out stronger, while
learning a lot in the process. One reality
of these cycles is that you come out of
them more efficient than you went in.
We see that in Wyoming, and the state is
poised to grow.
" The Powder River Basin has been
on the verge of really taking off for years,
and every day we seem to get closer, because
its economics have become very
competitive with other plays across the
country, " he relates. " Meanwhile, the lift
in natural gas prices is helping folks in
western Wyoming. There does not seem
to be any common technological thread
tying projects together. It is all about investment
following the economics. "
PAW President Pete Obermueller maintains
that the state's recovery is not as
swift or decisive as it can be, thanks in
large in part to actions such as President
Biden's move on his first week in office
to freeze new leasing on federal lands
and waters. " Things have been improving
and I think that will continue, but it is
happening slowly, " Obermueller assesses.
" The rebound has not been the sort of Vshaped
bounce for which we hoped, because
even with relatively strong commodity
prices, there are too many uncertainties
about doing business in Wyoming. "
To illustrate how chilling that uncertainty
can be, Obermueller points out
that the quantity of rigs operating in
Wyoming during January 2020 numbered
in the mid-to-upper 20s. During the first
week of July 2021, he continued, that rig
count stood at a dozen. " Activity is not
really even half what it was then, even
" It is a Wyoming comeback. We went
through a tough time and came out stronger,
while learning a lot in the process. One reality
of these cycles is that you come out of them
more efficient than you went in. "
-Joe Milczewski
PAW Chairman
though prices are at 2014 levels, " he reports.
" There is too much uncertainty-
particularly about federal land management
and wildlife policies-for companies to
feel confident about big investments. "
According to testimony Governor Mark
Gordon gave to the U.S. Senate Energy
and Natural Resources Committee in
April, the federal government owns 68%
of the state's subsurface mineral acreage.
Of that, Gordon testified, 26.58 million
acres are considered leasable, which excludes
national parks, national monuments,
national grasslands, wilderness areas, the
Wind River Indian Reservation and areas
that are geographically unsuitable for oil
and gas leasing.
" Of those leasable federal mineral
rights, only 9.13 million acres are currently
leased (approximately 34%), " he stated.
" Currently available but unleased federal
acreage is 17.45 million (approximately
66%). In perspective of the total amount
of federal mineral rights acreage, 23%,
or less than a fourth of the federal mineral
estate, is actually leased for oil and gas
in Wyoming. "
Positive Ruling
Biden's efforts to halt leasing on federal
property faced a setback in mid-June,
when a federal judge for the Western
District of Louisiana enjoined and restrained
the Biden administration from
pausing new oil and gas leasing on public
lands and waters (AOGR, July 2021, pg.
16). While that litigation was filed by
Louisiana and 12 other states, Obermueller
and Milczewski note that PAW is co-litigating
alongside the Western Energy Alliance
in a separate suit on the same
matter pending in Wyoming District Court.
" We also filed for a preliminary injunction
and hope that moves through
with a favorable ruling similar to the preliminary
injunction in Louisiana, " Obermueller
reports. " The law is on our side.
The U.S. Department of Interior says it
is exercising discretion, but the law is
clear that it has no discretion on quarterly
lease sales. "
Unfortunately, Obermueller acknowledges,
an administration that is unwilling
to expand federal minerals production
has other avenues for frustrating it. " Even
if we ultimately prevail in the case on
the merits-and I hope we will-that does
not mean it is all rainbows and unicorns
from that point, " he cautions. " In terms
of acreage volumes and everything else,
there is a lot of gray area. DOI can make
things as difficult as it wants, the first
few months of this administration have
shown it intends to make things as difficult
as possible. "
Some of that appears to be simple
posturing, he continues. " The rhetoric
out of the Biden administration says the
AUGUST 2021 31
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