CASPER, Wyo. (AP) - Wyoming regulators have voted to suspend a tax for six months to help oil and gas companies weather hard times in their industry.
Tuesday’s vote by the Wyoming Oil and Gas Conservation Commission suspended the conservation tax for the first time in its 60-year history.
The 5-cent tax on every $100 of assessed value of production helps fund the commission. The state agency regulates the oil and gas industry and in some cases pays to plug and clean up abandoned oil and gas wells.
Other existing charges will cover the commission’s operational costs during the suspension, commission spokeswoman Kimberly Mazza told the Casper Star-Tribune.
Such charges include filing fees the industry pays when companies apply for drilling permits.
World oil prices have tumbled as the coronavirus spreads and Russia and Saudia Arabia fight an oil price war.
“The vast majority of producers in Wyoming are small businesses that contribute significantly to our communities. Any efforts to keep these operators in business is good for Wyoming,” Petroleum Association of Wyoming spokesman Ryan McConnaughey said in a statement.
Others worry the suspension could impede the commission’s ability to clean up orphaned wells.
“It is very concerning that the orphan well problem is likely to grow and the WOGCC still has over 2,000 orphan wells to plug right now. This seems irresponsible and misguided,” said Jill Morrison with the Powder River Basin Resource Council landowner advocacy group.
Commission members include Gov. Mark Gordon, who on Friday signed a bill that would lower a different state tax on oil and gas production if low prices persist.
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