Committee advances bill to create voluntary oil-and-gas bonding pool to help small operators meet new federal bonds

At a meeting of the Minerals, Business & Economic Development Committee, members advanced Senate File 20, a measure that would authorize the Oil and Gas Conservation Commission (OGCC) to establish a voluntary financial-assurance pool or to contract with a private bonding provider to help operators meet federal and state bonding requirements.

The bill was described by Tom Kropatch, state oil and gas supervisor at the OGCC, as a response to a recent Bureau of Land Management rule that raised minimum bond levels. "The BLM did modify a rule this summer ... it changed a lease bond ... from $10,000 to $150,000 minimum bond. And it changed the statewide bond ... from $25,000 to $500,000 minimum bond," Kropatch told the committee, adding that the changes would make it difficult for many small operators to obtain or afford bonds for federal lands.

Why it matters: Committee witnesses and industry representatives said the new federal bonding levels — and tougher conditions in the commercial surety market — risk forcing many small Wyoming operators out of business or into abandonment, increasing orphan-well risk and shifting plugging and reclamation liabilities to the state. Proponents said a pooled, voluntary approach would spread risk, lower costs, and preserve production from small operators that together supply a significant share of state output.

What the bill would do: The bill creates a voluntary program that the OGCC…