Wyoming Energy Authority Takes Production Challenges by the Pronghorns

DENVER—With so many components of the Wyoming energy sector looking up, Paul Ulrich of Jonah Energy couldn’t help but wonder why the rig count was not one of them.

So Ulrich, Jonah’s vice president for government and regulatory affairs, shifted into his other role, that of chairman of the Wyoming Energy Authority, to find out.

The problem isn’t price.

“I can’t tell you how happy I am about that since they’re the highest prices I’ve seen since we formed Jonah Energy in 2014,” Ulrich said June 29 at Hart Energy’s DUG Bakken and Rockies Conference and Exhibition. “Oil prices are up. The energy economy is good. Very friendly regulatory and legislative framework built in Wyoming.”

He doesn’t have an answer yet, but part of the Energy Authority’s mission is reach out to operators, service providers and other players and try to identify roadblocks to increasing rig count and production in the state. The organization acts as an advocate for the entire energy industry Wyoming, including oil, natural gas and coal, but also uranium, solar and wind.

It’s also been tasked by Republican Gov. Mark Gordon to figure out a path for the state to provide a net-zero energy mix—no small challenge for a traditional oil and gas state, and one of the largest oil producers in the country. But Ulrich believes it’s doable.

“There are efforts by the industry, efforts by our legislature, and our governor and others to make that a reality,” he said. “And we certainly believe it’s possible.”

“The market has given us a remarkably clear signal, to Rockies producers and natural gas producers: If we’re going to continue to be viable, we have to clean up our act, and a lot of us are putting a tremendous amount of effort into providing the most responsible stream of natural gas as possible.”—Paul Ulrich, vice president of government and regulatory affairs for Jonah Energy, and chairman of the Wyoming Energy Authority

For the moment, however, part of the reality is a negative public perception on the part of the customer base, primarily on the West Coast. “For some reason, they’re not thrilled with us although we, as you well know, power a lot of those electric vehicles they drive,” Ulrich said.

Getting there

Still, the energy business is not a popularity contest but a business, one whose customers have made their thoughts known.

“The market has given us a remarkably clear signal, to Rockies producers and natural gas producers: If we’re going to continue to be viable, we have to clean up our act, and a lot of us are putting a tremendous amount of effort into providing the most responsible stream of natural gas as possible,” he said.

Natural gas is not a transitional but a foundational energy source, Ulrich said, which means that the industry must reduce its gas-related emissions to the negative to stay viable in the market. Jonah Energy, a Denver-based private, buys and develops oil and gas properties. It has made strides, he said, in quantifying its emissions reductions. 

When the sector as a whole can reduce its emission profile to insignificant levels, hydrocarbons will be able to compete with renewables on a level playing field. At that point, Ulrich said, all will be contending with the types of environmental impacts that are associated with any energy source.

Long live the sage grouse

Leading in environmental areas is another way in which the industry can burnish its public image.

A study by the University of Wyoming showed the benefits of reclaiming land that had been used for coal and uranium mining. A method known as geomorphic reclamation aims to reintroduce the plant and animal species diversity present in adjoining land. The result: when sagebrush and rabbitbrush returned, so did the sage grouse, pronghorn and other wildlife species.

That is of particular importance for the oil and gas industry, where pads operations have often interfered with sage grouse mating season. In Wyoming, 24% of the state’s managed sage grouse program involves core oil and gas areas. 

“We need to keep our eye on the ball and make sure that, as operators in the industry, we’re staying ahead of that regulatory regime and we’re doing all we can to minimize those impacts to preclude the need to relist that bird,” Ulrich said. “If the feds get their hands on the management of sage grouse, that is 70% of the state where operators have virtually no control over the future.”