Nearly 70 years after the last update and more than 10 years after formal recognition of the inadequacy of federal onshore bonding requirements for oil and gas operations, the Bureau of Land Management last summer proposed a significant increase in bonding thresholds.

But it fundamentally maintained the same system of financial assurance and the same requirements for decommissioning.

While most public comments seemed to support the proposal, the oil industry and some oil-producing states objected that the change is unnecessary, will drive some smaller companies out of business, and will thus increase the rate of orphaning in the near term. On a broader scale, advocates assert that the loss of existing production and production growth, in particular by smaller companies, will harm the economy and finances of state and local governments as well as national energy security.

To investigate how the higher level of bonding could play out in the current dynamics of the oil industry, this report looks to the state of Wyoming as a case study because it is dominated by federal lands and because it has championed opposition to the proposed rules. A detailed study of one productive area in Wyoming, the Big Horn Basin, provides a closer look at a sample of the kinds of old production that occupies most federal lands.