The Powder River Basin| January 2020
Field Overview
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
Active Drilling Rigs in Basin- 42
Total Rigs in Wyoming- 23
Total Rigs in United States- 790
Total U.S. Rigs down 34% YTD
State Top Producers
Top Gas Producer- Carbon Creek
Top Oil Producer- EOG
Financial & Economic Updates
Lawsuit Seeks to Cancel 2 Million Acres Oil and Gas Leasing on Federal Land
The WildEarth Guardians filed the suit on Jan. 9 in U.S. District Court in Washington, D.C. The acreage was leased in New Mexico, Colorado, Montana, Utah and Wyoming. The groups cited the Federal Bureau of Land Management’s alleged failure to address the environmental impacts of oil and gas developments on the land in approving the leases. WildEarth Guardians claim, “The Trump administration is selling out America’s public lands to the oil and gas industry and fueling the climate crisis. With this lawsuit, we’re taking a stand against this administration’s exploitation of public lands and abject climate denial.” Derrick Henry, spokesman for the BLM replies, “The BLM’s leasing decisions are lawful and fully compliant with the National Environmental Policy Act, despite the claims made in the lawsuit. In fact, these leasing decisions were informed by public input, as required by law, which was considered before issuing a final decision.” The state suffering the most from the conflict is Wyoming with 1.7 million acres under scrutiny.
State Highlights
Wyoming State Geological Survey Reports Nothing but Good
The Wyoming State Geological Survey release the “Oil and Natural Gas Resources in Wyoming January 2020 Summary Report,” which has high hopes for the future of the industry within the state. A few highlights of the report include:
• “Wyoming oil production is forecast to reach levels not seen since 1993 for the second consecutive year.”
• “The Powder River Basin has traditionally been, and continues to be, Wyoming’s top oil-producing basin, consistently accounting for at least one-third—and since 2014, more than half—of the state’s oil annually.”
• Wildcat wells accounted for 40 percent of the state’s total 2018 oil production. “This percent-contribution from wildcat wells is expected to continue its upward trend in the future.”
Trump Administration to Remove Bureaucratic Barriers to Development
The National Environmental Policy Act requires the government to undertake sweeping environmental reviews of proposed infrastructure projects, investigating how potential development could impact the nation’s land, air, wildlife and water resources. The U.S. Council on Environmental Quality received a directive from President Donald Trump in 2017 to update the rules, which Trump considered a major barrier to completing critical infrastructure developments. In a change overwhelmingly welcomed by energy groups, federal regulators will have a mandate under the new rules to complete environmental reviews within two years. Environmental assessments will need to be completed on a one-year timeline. Right now, environmental impact statements take an average of 4.5 years. While Wyoming-based companies like Jonah Energy have elected to wait out the regulatory hurdles in the state, other, larger companies have fled to more lucrative areas, he explained. In Ulrich’s mind, that has a cumulative financial loss for Wyoming.
Top Gas Producers
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Top Oil Producers
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Refining
Wyoming Gas Production
Wyoming Oil Production
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