Split Estate and Wyoming’s Orphaned Well Crisis: The Case of Coalbed Methane Reclamation in the Powder River Basin, Wyoming

Abstract

This case presents the stakeholder conflicts that emerge during the development and subsequent reclamation of abandoned natural gas wells in Wyoming where split estate, or the separation of surface land and mineral rights from one another, occurs. From 1998 to 2008, the Powder River Basin of northeastern Wyoming experienced an energy boom as a result of technological innovation that enabled the extraction of coalbed methane (CBM). The boom resulted in over 16,000 wells being drilled in this 20,000 square-mile region in a single decade. As of May 2017, 4,149 natural gas wells now sit orphaned in Wyoming as a result of industry bankruptcy and abandonment. The current orphaned wells crisis was partially enabled by the patchwork of surface and mineral ownership in Wyoming that is a result of a legal condition referred to as split estate. As the CBM boom unfolded in this landscape and then began to wane, challenges emerged most notably surrounding stalled reclamation activities. This case illuminates these challenges highlighting two instances when split estate contributed to issues between landowners and industry operators which escalated to litigation.