When Exxon considered building the Shute Creek natural gas plant...

When Exxon considered building the Shute Creek natural gas plant in Lincoln County in the 1980s, it understood that about 65 percent of the gas production stream was CO2. Only the methane -- and particularly the helium -- made it an economic proposition. And only if it could vent some of the CO2.

Some in the oil industry were interested in CO2 for enhanced oil recovery programs, but the price of oil was tanking. Nevertheless, the Wyoming Oil and Gas Conservation Commission took the same view it still holds today: Does the CO2 being vented have value?

"One indicator of that is the price companies are paying for CO2 or willing to pay," said Don Likwartz, commission supervisor. "Ordinarily, the commission wouldn't have any real authority over that gas, except that we are also not supposed to allow waste of a product that can be sold."

The commission allowed Exxon to vent CO2, which allowed Exxon to go ahead and build the Shute Creek gas plant.

In the early 1990s, the commission saw a slight recovery in the price of oil and created a price trigger. If the price of oil went up to or above $15 per barrel for a period of 18 months, the commission would curb CO2 venting at Shute Creek. Essentially, it was meant to pressure Exxon to build a CO2 pipeline to market the CO2 to enhanced oil recovery projects.

"That was an attempt by the commission to force Exxon to lay a pipeline to a field Exxon operated in the Powder River Basin -- Hartzog Draw," Likwartz said.

Though the price trigger never came into play, the state nearly went to court over the matter. Eventually, Exxon built a pipeline to the Rock Springs area. Chevron connected the pipeline to its Rangely field in western Colorado and began CO2 injections there.

Another pipeline connection was extended to Bairoil for another enhanced oil recovery project.

The commission eliminated the oil price trigger sometime around 2002, when Anadarko Petroleum purchased the Salt Creek oil field, along with CO2 supply and exclusive CO2 marketing rights for the rest of the Powder River Basin. Likwartz said Anadarko had access to 115 million cubic feet of CO2 per day for its own use or to market to others.

Anadarko connected the CO2 pipeline from Bairoil to the southern Powder River Basin and began CO2 injections in the Monell field in 2003, and in Salt Creek in 2004.

Likwartz said Anadarko's contract for exclusive marketing rights in the Powder River Basin has been modified, which allowed Exxon to contract CO2 to Rancher Energy's pending enhanced oil recovery project near Glenrock.