Key Legislator Worries Activists Could Hurt Wyoming Economy In Oil And Gas Auctions

State Rep. Cyrus Western, R-Big Horn, the outgoing House majority whip, is concerned that a Lander-based conservation advocacy organization is waging a war on Wyoming’s middle class through the state’s oil and gas lease auction bidding process.

His nervousness is with the Wyoming Outdoor Council prioritizing preservation of a pronghorn migratory route south of Pinedale over drilling for oil and natural gas — a cash lifeline for Wyoming.

Also, state oil and gas leases in the area are held for the purpose of developing those public lands, he said. That’s why he was the primary sponsor of a bill in the 2024 legislative session that closes a loophole to help keep activist groups from bidding on leases to either take them out of the state’s energy mix or bump up costs for producers.

In a worst case scenario, Western told Cowboy State Daily that he sees the group’s strategy as one that could lead to layoffs as the energy industry comes to grips with significant cuts to more than $2.4 billion in taxes that the industry contributes to state coffers annually.

“It comes down to the question of should environmental organizations be allowed to bid on and receive leases for oil and gas?” Western asked during a Thursday interview with Cowboy State Daily. “And I think unequivocally, they should not.”

Western’s bill, House Bill 141, was signed by Wyoming Gov. Mark Gordon earlier this year. It added more requirements and oversight on people who bid for oil and gas leasing on state lands.

HB 141 redefines “qualified bidders” in oil and natural gas auctions, making it virtually impossible for groups like the Wyoming Outdoor Council to bid on state land and do nothing with it, Western explained.

“They actually were very quiet through that entire process,” said Western of the Wyoming Outdoor Council.

“By virtue of them not strongly opposing it (the legislation when it came up), this was kind of a tacit acknowledgment that they knew they should not be bidding on these leases, and that they were not intending to exercise those leases and to extract minerals from the ground,” Western said.

'That's How Capitalism Works'

Carl Fisher, executive director of the Wyoming Outdoor Council, has declined to answer several questions posed to the group on the specifics of last year’s state-run auction or on Western’s comments about the Outdoor Council.

Despite Western’s comments about why he sponsored the qualified bidders bill, the Outdoor Council has previously maintained it didn’t bid on a lease last year to drive up prices.

Steve Degenfelder, an executive with Kirkwood Cos. which eventually won that lease, and the head of the Petroleum Association of Wyoming see it differently.

Degenfelder and Pete Obermueller both told Cowboy State Daily of concerns they have that billionaires could exploit Wyoming’s oil and gas lease sales to keep the leases from being developed.

Both mentioned billionaire Michael Bloomberg, who has thrown more than $1 billion on campaigns to support clean energy transition projects.

“If it’s two legitimate oil and gas companies bidding against each other, that’s the open market. That’s how capitalism works,” Western said. “But when you have non-qualified or illegitimate participants, I think that’s where you start to see these wonky market dynamics and I think that’s where the Legislature needs to step in and put up some sideboards.”

Western defended his legislation.

“These oil and gas leases, and the extractive industries, are so important to Wyoming,” he said. “They are key drivers between our middle class in the state and creating those high-quality, middle-class jobs.

“At the end of the day, I appreciate that they think they’re (Wyoming Outdoor Council) fighting for the environment, but what they’re doing is they’re waging war on middle class jobs in Wyoming. These organizations should not be bidding on leases, because they’re not oil and gas companies, and when they go and bid on these leases, they drive up the price of these leases, and then that makes it more costly to do business in Wyoming for these oil and gas companies.”

Many of the bidders in Wyoming’s auction of oil and natural gas leases are mom-and-pop shops, he said.

No Santa Claus?

“There are plenty of oil and gas companies with 20 or fewer employees in Wyoming, and having to spend an extra $10,000, $20,000 or $50,000 on a lease, that’s real money to these companies,” Western said. “That’s the Christmas bonus that they were planning on giving employees.”

Western, who is an avid hunter, said he respects the Wyoming Outdoor Council’s conservation mission, within reason.

“I respect their right to advocate for their causes and values, but when they are hindering the industry to do their job, that’s where I have a serious problem, and that’s why I brought forward this legislation,” he said. “Those leases are intended for companies that want to explore for oil and gas, and only that.”

The legislation offered up by Western came about because of a private conversation the influential member of the Wyoming Caucus had with Degenfelder, land manager for Casper-based Kirkwood.

Kirkwood operates more than 400 wells in six states, including Wyoming, Colorado, Nevada, North Dakota, Montana and Utah.

“He did bring that up. I’ve personally spoken with Kirkwood,” Western recalled.

Degenfelder confirmed that the conversation took place with Western at a Wyoming business reception in the fall.

“He was very interested in not letting this manifest itself,” Degenfelder told Cowboy State Daily on Thursday.

Degenfelder raised concerns with Western about the Wyoming Outdoor Council when it attempted to outbid a few oil and natural gas companies that wanted to drill on state land put out for auction nearly a year ago south of Pinedale.

As a qualified bidder in the auction, the Wyoming Outdoor Council admitted to Degenfelder after the auction was held that the conservation group wanted to knock off industry players in the auction process and preserve a bottleneck migratory route used by pronghorn antelope.

The bottleneck was located on tract 194, located south of Pinedale.

Electronic auctions to buy oil and gas leases on state-owned land can be challenging. This is because anonymous bidders in auctions operate over a private online network, called EnergyNet, by Wyoming’s Office of State Land Investments (OSLI) and don’t always tell the full story of an entity’s motives or disclose their identity.

No More Bidding?

With the new legislation, the Wyoming Outdoor Council can only participate in an oil and gas lease auction if it becomes a qualified bidder and intends to drill on the land.

This was the point pushed by Degenfelder in his conversation with Western.

Degenfelder argued that the Wyoming Outdoor Council wasn’t a qualified bidder because the Wyoming Outdoor Council’s “sole interest” was to not develop the oil and gas resources.

This is why Degenfelder’s company requested a refund of $14,720 related to last year’s auction but was turned down by the OSLI.

Last week, Gordon signed an emergency order to implement changes in the state-led oil and gas lease auction that ends July 17 to keep environmental activist groups from driving up bids and taking energy-rich properties out of the hands of developers.

The order was in line with Western’s legislation.

The auction was expected to end July 10, but was pushed back a week due to “significant impacts” caused by Hurricane Beryl in the energy-rich urban hub of Houston where some bidders needed more time to participate.

Pat Maio can be reached at pat@cowboystatedaily.com.