Proposed land swap angers landowners, legislators
September 3, 2020
GILLETTE — An oil and gas company’s proposal to trade land with the state has angered landowners in southern Campbell County.
In July, EOG Resources asked the Campbell County Commissioners to support a proposed land swap between the oil and gas company and the state of Wyoming.
There are eight sections of state land in southern Campbell County and northern Converse County measuring 5,120 acres. EOG proposed trading eight sections of land in Laramie County, southeast of Cheyenne, to the state in exchange for the land in Campbell and Converse counties.
EOG also proposes to pay the state $300,000 a year until 10 wells are drilled on the land. It also projects that the tax and royalties to the state from the drilled wells “should likely exceed income currently generated” by the state lands or the proposed annual payment.
EOG estimated the surface value of the sections of state land was $600 an acre while its own property in Laramie County is valued at $2,000 an acre.
In EOG’s view, it’s “a reasonable proposed exchange that will strongly benefit the state and county governments,” according to the proposal. EOG said its land is worth $10.6 million, while the state land is $3.1 million.
But during the Campbell County Commission’s meeting last week, landowners, attorneys and state legislators all asked the commission to oppose the trade.
Ranchers have agreements with the state to incorporate those state sections into their ranching operations. Many of the state lands are surrounded by private land on all sides.
Lee Isenburger, whose ranch incorporates two of the sections of land that EOG wants to acquire in the proposed trade, said that if the trade goes through, his operation will be affected by at least 20%.
“We can graze the ground while they’re doing development, but with the developments they’re going to make, there’s not going to be much ground (to graze on),” he said.
Attorney Tad Daly, representing Isenburger, said it would set a “very dangerous precedent” in Wyoming.
“The precedent we’re concerned about being set is, Wyoming then becomes in the business of selling or exchanging lands to the highest bidder,” Daly said.
Kristi Bohlander, a landowner in Converse County, said she spoke with all the landowners who would be affected, “and all of them are against the project.” She added that her family had gotten along with EOG “for a really long time.”
“We negotiated 57 wells on our place with them,” she said. “We got along with them really well until about a year ago. Then I think something in their management changed.”
Eric Dille, vice president of government relations for EOG, said the change in economics due to the COVID-19 pandemic is “the biggest issue that’s driving any changes you’re seeing now.”
“We’re willing to talk to everyone. We’re not trying to roll over anyone,” Dille said, adding that Isenburger was sent a questionnaire, which he did not complete.
He pointed out that in 2019 alone, EOG paid $173 million to the state in ad valorem tax and royalty revenue.
Floyd Reno & Sons has operations on two of the sections of land in the proposed trade. Mike Fuller, an attorney representing Floyd Reno & Sons, said it’s not even close to being an even trade.
“The land they’re proposing to trade does not have the same value, or the same potential these lands have had through the years. It’s not a fair trade,” Fuller said.
He compared the proposed trade to building in someone’s backyard in Campbell County and in return giving them an equal-sized piece of land in another county.
“You can’t allow these companies to come in and take your backyard and trade you for a backyard that doesn’t produce, that’s not connected, that doesn’t add any value to your operation,” he said.
Daly said that by allowing EOG to take ownership of these state sections, it paves the way for other companies to start putting “large commercial industrial facilities” in the middle of a ranch.
“They want to put industrial sites in the middle of these ranches and not have to pay for it,” Fuller said.
Daly added that EOG hasn’t been very open about communicating.
“We’ve requested numerous meetings of EOG, requested audits of our surface use agreement, requested copies of other documents,” he said. “We have not been privy to the application that was filed. They are not communicating with the landowners.”
Rep. Eric Barlow, R-Gillette, said the way the process is structured puts landowners at a disadvantage. Under current state statute, EOG “can keep it confidential until it goes to the state,” he said.
Barlow said he and other lawmakers will work in the 2021 legislative session to address the issue.
“Good fences don’t make good neighbors. Good people make good neighbors, people that are honest in how they treat you and are forthright,” he said.
“It’s very important the landowner has a seat at the table to mitigate what that impact is on their agricultural operations,” Daly said.
A lot of energy companies come and go, said state Sen. Ogden Driskill, pointing out numerous companies that were here for the coal-bed methane boom, many of which are now “long gone.” Agriculture, on the other hand, has been part of Wyoming since before it became a state.
“We really don’t need to lose some of our long-time neighbors and the backbone of our state. I think that’s what we’re messing with,” Driskill said.
He asked the commissioners to oppose the trade.
“You have immense power,” Driskill told commissioners. “The state looks to you for leadership on these (state) sections.”
Converse County Commissioners have unanimously agreed to oppose the land trade, Daly said.
Commissioner Del Shelstad suggested holding a public hearing in Wright to hear from more of the landowners.
“If you don’t want it, I don’t want it,” he said to Isenburger. “I think private property rights are getting pushed back by government and corporations, and that’s tragic.”
“We’ve been walked on before,” said Commissioner Bob Maul. “I think it’s time we stand up and take a stance.”