It is no secret that Wyoming’s economy is heavily reliant on the energy and natural resources sector. In fact, the primary forces behind the economy of the Cowboy State are mineral extraction, in the form of coal, oil, natural gas and trona, and agriculture.
Wyoming is an attractive place to do business due to state incentives like no income tax and low sales and property taxes; however, Wyoming may become even more of a hot opportunity state in light of the passage of Senate Bill 181 by its neighbor to the south, Colorado.
Colorado has recently taken
serious steps to increase oil and gas regulation and revamp the make-up of the Colorado
Oil and Gas Conservation Commission. As
Governor Jared Polis signed SB 181 into law yesterday, April 16, 2019, many are
trying to anticipate the impact that the bill will have on the oil and gas
industry in Colorado. The future of oil
and gas is uncertain, due in part to the significant reforms mandated by SB
181. For a full discussion of the
sweeping impacts of the bill, check out our prior post here.
I have heard several folks referring to Colorado’s SB 181 as “Wyoming’s Economic Stimulus Package.” The comment has been said in jest, but it got me thinking…
Will the oil and gas industry shift more of its focus to the Cowboy State in the wake of SB 181?
There are several factors that support the theory that Wyoming will greatly benefit from Colorado passing SB 181, including:
- Rural Nature of Wyoming – Wyoming is one of the least populated states in the country. In addition, the population of the state is spread out – meaning the population density is very opposite to that of Colorado. As a result, the friction that Colorado has faced with the oil and gas industry as its towns and communities have rapidly expanded into producing areas will be practically a non-issue for rural Wyoming. In fact, the New York Times wrote an article last summer commenting on this issue of the increase of production in Weld County coupled with Colorado’s population boom entitled, “In Colorado, A Fracking Boom and a Population Explosion Collide.” Wyoming is a much more attractive environment for operations than Colorado, given Wyoming’s lower population.
- Pipeline Projects Underway – Miles of new natural gas and crude oil pipelines, as well as CO2 pipelines, are scheduled to be constructed in Wyoming. The Casper Star Tribune article entitled, “A Network of Pipeline is Spreading in Wyoming as Energy Companies Prepare for the Next Boom,” discusses the pipeline projects in the state. This is a major factor as companies need to have a way to move crude out of the state.
- Attitude – Wyoming residents are, in general, supportive of responsible oil and gas development in the state. Talk in Wyoming is positive and hopeful of the boom to come, and folks are making what preparations they can in the hopes of a boom in the oil and gas sector again – welcoming it with open arms. Wyoming residents recognize the value of the revenue that oil and gas operations bring to the state.
- Workers with Grit – Wyoming is known for its quality of worker; Wyoming folks work hard and with grit, as working outdoors in all weather conditions requires.
Wyoming presents a favorable opportunity for the energy and natural resources sector to grow, but will the oil and gas industry shift its focus to the Cowboy State in the wake of SB 181?
It is likely that Wyoming will benefit from the passage of SB 181 in Colorado, but only time will tell if SB 181 will be Wyoming’s new economic stimulus package…stay tuned!