Bruce Hinchey, president of the Petroleum Association of Wyoming

Wyoming Oil and Gas Supervisor Mark Watson Monday indicated support for raising bonding requirements on oil and gas wells, the Casper Star-Tribune reported Monday.

“Bond levels have become a bigger issue in recent months as the state grapples with the task of closing an estimated 1,200 abandoned coal-bed methane wells on state and private land in the Powder River Basin,” the paper said.

Bankruptcies among some oil and gas operators after the collapse of natural gas prices in 2010 left the state with the bill for dealing with abandoned wells.

Landowner groups and environmentalists want higher bonds.

Bruce Hinchey, head of the Petroleum Association of Wyoming, said oil and gas companies already pay the cost of the state’s plugging program through a production tax known officially as the conservation levy, the Star Tribune said.

But Watson, who took the helm of the Wyoming Oil and Gas Conservation Commission in April, said the state could consider a “stair-stepped” approach, where companies with more wells would pay higher bond.

He said he wants to avoid penalizing companies who close their wells.

Watson hasn’t yet presented a plan to the state’s oil and gas commission, which would have to approve an change in bond requirements, the report said.



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