Thursday, November 17, 2011

New rules for royalty-free gas flares up for comment


The Wyoming Office of State Lands and Investments has issued its proposed policy changes regarding royalty-free flaring of natural gas. Written comments are due to the agency by the close of November 29, and should be emailed to Harold Kemp,

Flaring — or setting natural gas ablaze — is a common practice in the production of oil and natural gas, typically reserved to a short period of time after a well is completed. Operators flare to get rid of impure streams of gas that do not meet pipeline specifications, and sometimes commercial-grade natural gas is flared in establishing initial flows from new oil wells — particularly when there are no gas-gathering pipelines available.

While the Wyoming Oil and Gas Conservation Commission occasionally permits flaring for periods longer than the standard 15 days after completion of the well, it’s up to the Office of State Lands and Investments to determine whether a royalty will be applied to gas flared from wells tapping “school trust lands.” The State Land Board — made up of Wyoming’s top five elected officials — hold in trust millions of surface acres and mineral estate acres and is required to oversee those lands for dedicated beneficiaries, primarily Wyoming’s K-12 students.

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Click here to download a PDF of the proposed policy change.


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