Coalbed Methane Fights in Montana and Wyoming

Surface Tension

By Matt Singer, 5-10-05

Courtney already highlighted this article in her grok this morning, but I'm going to talk a bit more about it anyways. Todd Wilkinson, writing for the Christian Science Monitor, looks at surface owners trying to deal with drilling on their land. It is a story that has been looked at here many times (one earlier post that I wrote brought about an interesting exchange between my father and me), but there are a few points I wanted to raise.

The story highlights the different numbers of wells in Wyoming (13,000) and Montana (450). Part of that difference is potential. Most of it has to do with differences between the two states and the relative strength of the conservation movement in Montana versus Wyoming. But those numbers have also had an interesting effect. Despite increased drilling across the West, Wyoming was the only state to approve surface owner protection legislation this year.

Also humorous is that a spokesperson for Fidelity, one of the major drilling operators in Wyoming, says that regulatory hassles are preventing more drilling. That is partially true. Fidelity is encountering lawsuits. But the biggest impediment to more extraction is labor and capital, not the government.

Still, the benefits of drilling are evident. One DC Think Tank recently (and laughably) ranked Wyoming as one of the highest tax states because they raise the most tax revenue per capita (the imbalance probably gets even worse when adjusted for income). But Wyoming residents are laughing all the way to the bank on this one. Most of those taxes come from severance tax income, paid by these drilling companies, not by Wyoming residents.

Montana saw its own severance tax revenue fall after we slashed our rates in the '80s in order to attract more extractive industries. It didn't accomplish its mission, but it sure makes me pay more for tuition these days.

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