Seeking to coordinate more closely with other state stakeholders, Wyoming’s Office of State Lands and Investments plans to delay action on the state’s draft policy on natural gas flaring until January next year. That would put off action until the State Board of Lands Commissioners, which includes Gov. Matt Mead, meets next year.

At stake are supplies of gas coming from new wells on state lands designated as school trust properties, meaning the value of the gas and its royalty revenues help fund the state’s public schools. The issue continues to be watched closely outside the energy industry as a result.

The proposed policy would impose royalty payments on gas flared after 15 days of a well being completed. That is in sharp contrast to current practices that allow administrators in the state lands office to grant exemptions for royalty-free flaring for up to 180 days.

The draft policy was originally going to be considered by the lands commissioners at their December meeting.

Ryan Lance, director of the lands office, told local news media over the weekend that there is still more work to do on the draft, noting that his goal is to “get the policy right the first time” so it doesn’t require revisions later.

Draft provisions would allow royalty-free venting exceptions for up to 180 days, but some critics have said it should be limited to 60 days. Dan Neal, executive director at the Equality State Policy Center (ESPC), is urging resolution of the policy as soon as possible. ESPC has advocated for a higher royalty rate that it contends would be more comparable to market values of the minerals being extracted. “The minerals are public property and the royalty revenues support Wyoming’s public education,” Neal said in a commentary on the ESPC website.

“Decisions that affect those revenues, such as allowing flaring, should be made openly to enable the public to understand and evaluate the rationale used to justify them.”

A side issue in the flaring debate is the need for a common agreement on what constitutes a “completed well,” because the draft policy on allowable flaring time only starts after a well is completed. If the act of completion remains ill defined, advocates argue that flaring could go on (with revenues to the state lost) far beyond the limits now being considered. Lance and the lands office are working with the state Oil/Gas Conservation Commission to define when well completion has occurred.

Under the current draft policy, from the time an operator signals that a well is completed and files for a permit to flare gas, that operator will be required to keep track of all production and flaring because the firm may end up having to pay a royalty on all flared gas if it is denied the flaring or venting approval.

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