Wyoming ranks 8th nationally for both crude oil and natural gas production and 2nd for both produced on federal lands. Oil and gas are produced in twenty-one of Wyoming’s 23 counties, making it the second-largest producer of oil and natural gas on federal land. In 2023, the Wyoming oil and gas industry contributed $2.43 billion to state and local governments and, as of 2021, directly employed over 20,000 people in Wyoming.
Crude oil and natural gas are made from algae, plankton, and other organic matter that sink to the bottom of the sea and mix with mud. The mud and organic matter are buried by thick layers of sediment, which creates pressure and high temperatures. After a sustained period of geologic time, the organic material becomes kerogen and bitumen. As the temperature rises, the kerogen changes into crude oil through a process called “thermal cracking,” known as catagenesis. Oil is formed between 150° and 300°F, whereas natural gas is formed at temperatures exceeding 300°F.
The oil and gas industry is a significant driver of the Wyoming economy and has a statewide impact. Wyoming production occurs in eight distinct geologic basins around the state: Bighorn Basin, Denver-Julesburg Basin, Greater Green River Basin, Hanna Basin, Laramie Basin, Overthrust Belt, Powder River Basin, and Wind River Basin. As of 2021, Wyoming has 978 million barrels of proven oil reserves, which accounts for almost 2.4 percent of the total U.S. reserves.
The oil and gas industry encompasses a wide spectrum of activities and processes. In Wyoming, two organizations oversee practices and innovation that advance the industry.
Enhanced Oil Recovery (EOR) extracts oil trapped in reservoirs after primary depletion using heat, chemicals, and gas injection, primarily by injecting carbon dioxide (CO2) to improve oil flow. This increases well productivity, recovering up to 30%—60% of original oil.
To further enhance oil production and increase the state’s tax revenues, the Wyoming State Legislature created the Wyoming Enhanced Oil Recovery Institute (EORI) in 2004. EORI collaborates with Wyoming oil producers to increase recoverable reserves and oil and natural gas production. Their efforts have generated over $270 million in severance tax revenues for Wyoming and produced over 40 million additional barrels of oil. The Institute estimates an additional $6 billion in future state tax revenue from EOR projects across Wyoming.
The Wyoming Oil and Gas Conservation Commission (WOGCC) has overseen the state’s oil and gas activities since 1951, ensuring responsible development, management, and environmental stewardship. The WOGCC cooperates with the industry throughout a well’s life, managing spacing units, permitting, drilling, completion, operations, and reclamation. It regulates all Class II injection and disposal wells, including permitting, aquifer exemptions, drilling, injection reporting, mechanical integrity testing, and plugging operations.
Wyoming leads in carbon capture, utilization, and sequestration, with the WOGCC facilitating this through pore space unitization for Class VI wells and permitting CO2 EOR in Class II wells.
Photo Credit: Courtesy of the Petroleum Association of Wyoming
Wyoming State Geological Survey
Wyoming Department of Environmental Quality
University of Wyoming School of Energy Resources Center For Biogenic Natural Gas Research
Petroleum Association of Wyoming
Photo Credit: Courtesy of the Petroleum Association of Wyoming
