The Powder River Basin| December 2020
The Powder River Basin, known for its coal deposits, is located in Southeast Montana and Northeast Wyoming. The basin is named so because it is drained by the Powder River. Major cities in the area include Gillete and Sheridan, Wyoming and Miles City, Montana. There is a recent resurgence in oil and gas production as a result of horizontal drilling and hydraullic fracturing. This resurgence is occurring mainly in the Wyoming part of the basin, which is historically known as the source of the basin’s oil.
State Drilling Statistics (End of December)
Total Rigs in Wyoming- 4
Total Rigs in United States- 351
Total U.S. Rigs down 56% YTD
State Top Producers
Top Oil Producer-
Top Gas Producer-
Wyoming to Pour Funds Into 5k Wells
Many states have allocated CARES money to oil and gas projects, and Wyoming was the most recent to jump on the train. The BLM issued a decision allowing the development of 5,000 wells in Converse County. During the press release the BLM predicted 8,000 jobs would be created and in turn generate $18 to $28 billion dollars in federal revenues. The Governor, Senators, and state reps all praised the decision for its potential contribution to growth, wealth, jobs, and environmentally friendly development. The project will be financed at the front end with CARES Act money that had to be used before December, and the benefits of this project are projected to extend far into 2021.
Electric Taxation Disagreements
Wyoming lawmakers were scrambling to find new sources of revenue to compensate for the losses caused by COVID. Two bills were proposed, the first of which would double the wind generation tax, raising it to $2 per megawatt hour and remove the 3 year tax-free grace period. The second bill would increase the taxes on all electricity produced in Wyoming. Many responded to this bill by raising concerns over inevitable cost hikes for consumers and the deterrent of renewable energy investment in the state. Those who support the tax increase claim that the state doesn’t charge enough for developers, supporting their claims with the compromised views of Wyoming and harmed tourism. This is the 14th time the topic of increased taxation on wind energy has been brought up by the Joint Revenue Committee. Although both bills were voted down, the Joint Committee on Corporations did send a bill to next year’s session that would eliminate the three year tax free grace period that is currently available to new wind energy projects.
Top Oil Producers (2020 cum)
Top Gas Producers (2020 cum)
|5||Peak Powder River||8,016,948|
Wyoming Oil Production
Wyoming Gas Production
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