The law itself can be an intimidating subject, and reading it can be an even more daunting task.
However, I find my position as both a journalist and a first year student at the University of Wyoming College of Law has provided me with a unique opportunity to read, digest, and distribute information about lawsuits throughout the state of Wyoming and inform my community about them.
One such case is the Deselms et al v. Occidental Petroleum Corporation et al case in neighboring Laramie, County.
The case at hand revolves around the Niobrara and Codell formations of Laramie County, typically east of Cheyenne, and the rights of which to drill for oil and natural gas in the area.
Anita C. Deselms, Trustee of the Anita C. Deslems Living Trust, and a Nurse Practitioner of Cheyenne, has become the representative name for over a dozen Plaintiffs in the case.
Their claims against the Defendant, Anadarko, a subsidiary company of Occidental, at this time include: monopoly/monopsony, attempt to monopolize and/or monopsonize, and lastly violations of both Wyoming common law and Wyoming state statute, including the Wyoming Constitution.
For background, the area surrounding the Niobrara and Codell formations are broken into a checkerboard pattern. This was established in the 1860s to prevent the Union Pacific Railroad from monopolizing if it owned all of the land that the tracks connected to.
This preventative measure, with even plots being sold to the public and the odd plots to the Union Pacific Railroad, was unable to prevent the fact that while generations of farmers still hold their even plots, Anadarko and its subsidiaries have bought up various odd numbered plots in the surrounding area.
Such close contact between these conflicting parties has led to the claims of the plaintiffs, as each drilling arm installed by Anadarko is 2 miles long and oversteps the boundaries of the length of their 1 mile odd plots.
To elaborate, the first count that Anadarko faces is a monopoly charge on the fact that between 2016 and 2020, it increased both the number of plots owned and its royalty rates at 30% for competitors.
Seeing this, the plaintiffs allege that Andarko is “. . . seeking to capitalize on its dominant position by selling the mineral, leasehold, and drilling permit rights in the relevant market to another (the “Doe defendants”) at the bidder’s premium. . .” (Item 17, PG 12 of the First Amended Complaint of the Deselms v. Occidental case) as they also accuse Anadarko of setting royalty rates for itself and its subsidiary companies at 10%.
Both of these numbers represent either end of the national spectrum, which usually sits between 18% and 20%.
The second count for which the plaintiffs are suing Anadarko is the attempt of monopolization, alleging that Anadarko flooded the Wyoming Oil and Gas Conservation Commission (WOGCC) with drilling permit applications, slowing down the approval process for its competitors (both local and foreign, as in out-of-state).
Finally, the third count includes the alleged violations of Wyoming common law, statutory law, and the Wyoming Constitution.
Wyoming operates under a pooling policy, which although it saw revision in 2020, many plaintiffs were already under this policy’s effects prior, meaning that they were subject to receiving lesser royalties after being forced into contract with Anadarko and therefore violating Wyoming Statute § 40-4-101(a)(1).
Subsequently, Anadarko’s position could suffice as a violation as of both the Wyoming Constitution, Article 1 § 30 which states that quite simply, monopolies are not permitted in the state, and Wyoming common law as its possible monopoly through unreasonable restraints in trade of the relevant market for those notions mentioned above.
With the Wyoming state budget gaining up to 40-50% of its revenue from fossil fuel taxation, the fossil fuel industry has been the heart of the Wyoming economy for over a century, or ever since the first oil well was drilled in 1884.
This can only mean as the case moves forward, one can’t help but wonder what this means in the fossil fuel industry and how it may, or may not, increase opportunities for Wyoming residents and foreign competitors in our market.
