Setback Rule is More Than a Number

By Jim Magagna, Wyoming Stock Growers Association Executive Vice President

At times, numbers can easily become soul food for the mind. Understanding or defending a number, assuming that arithmetic, algebra and calculus are not involved, is so much easier than analyzing a formula or a complex process. This is certainly true regarding the current debate over the proposed “Setback Rule” of the Wyoming Oil and Gas Conservation Commission (OGCC).

The OGCC has proposed an increase in the setback from occupied structures from the current 350 feet to 500 feet. Some in the oil and gas community have opposed any increase, while numbers being advocated by the environmental community and some landowners have ranged from 700 feet to one-half mile. Meanwhile, far less attention has been given to the proposed rule’s emphasis on the supervisor’s authority to grant a variance, notice and meeting requirements and mitigation.

After careful study, the Wyoming Stock Growers Association (WSGA) has endorsed the proposed rule. We did not do so because we believe that 500 feet is the “correct” setback number. We doubt that there is a number that meets everyone’s needs while respecting the private property rights of both surface owners and mineral interests. WSGA endorsed the proposed rule because it provides for surface owners and mineral developers the opportunity to craft agreements that best fit in each case. Admittedly, this places a higher level of responsibility on both parties and on the Oil and Gas Supervisor and OGCC than a firm number that must be followed in al cases. 

In our comments filed with the OGCC, we stated, “The success of the proposed rule will rest upon the commitment of the Supervisor and the Commission to fair consideration of requests by either landowners or operators for a variance. Surface owners need to feel that they can have a fair airing of their concerns that may arise.”

WSGA further emphasized that the success of the proposed rule will be determined by the relationships that it fosters. 

“WSGA supports the added provision for notice to owners of occupied structures within 1,000 feet of the center of the wellhead and the requirement for a report to the Supervisor on the actions taken to communicate with the owners. These communications should involve not only the setback from occupied structures, but the overall impacts, both positive and negative, that can accrue to the ranching operation as a result of the development. Energy development on split estate lands should be viewed by both parties as potential for a partnership. We hope that operators will view this requirement as an opportunity to build fruitful relationships with surface owners. In turn, WSGA pledges to encourage our members to engage in constructive dialogue with operators.”

The proposed rule also places greater emphasis on mitigation. This component, if properly embraced by industry, can minimize many of the potential impacts of drilling including noise, lighting and road dust.

This rule, if adopted, will impose a significantly higher burden on industry. That burden is not measured by the difference between 350 feet and 500 feet. The burden is for all companies to operate as “good neighbors” to surface landowners. This is behavior that many, but not all, companies have demonstrated in Wyoming for decades.

In turn, landowners will not have received all of the “relief” that some may have wanted in the form of a much larger setback. WSGA believes that landowners will benefit from the proposed rule in being able to hold industry, where necessary, to a higher standard of communication and cooperation. Landowners must also commit to this standard in their negotiations.

Government agencies can play a critical role in providing the appropriate framework for resolution of conflicts among private property interests. However, when government attempts to become the solution to these conflicts, private property rights are most often diminished. 

WSGA concluded our comments with this principle in mind. 

Wyoming has deservedly gained a reputation for developing common-sense balanced regulations to guide the development of all of our natural resources. The proposed setback rule meets this test. WSGA urges the Commission to expeditiously adopt the rule without further modification.