The proposal calls for a buffer of 500ft between buildings occupied and vertical rigs and would set a minimum distance of 750ft for horizontal rigs, the Casper Star-Tribune reports.
The move comes as landowners have raised concerns over increasing oil production near communities, where much of the current drilling is around Cheyenne and Douglas.
Currently, the distance between drilling rigs is 350ft, Associated Press reports.
According to oil services firm Baker Hughes, 35 of 36 oil rigs in the state are horizontal as of 05 September.
The Powder River Basin Resource Council, a landowners group, has urged for a minimum quarter-mile distance, claiming that drilling near homes, business and schools creates potential health risks and lowers property values.
The council organizer Shannon Anderson said: "If we’re not going to go out a quarter-mile, then we need additional measures to protect people’s quality of life."
Currently, the proposal includes no additional mitigation measures, the commission’s natural resource program supervisor Tom Kropatsch said.
The Petroleum Association of Wyoming vice president John Robitaille said that the plan’s impacts on wells should be determined whilst also analysng if the mineral rights might get affected.
Robitaille said: "And we’ll certainly take a look at their proposal. We’re not saying an absolute ‘no.’ … We are reviewing and looking at what this proposal may actually do to us."
The plan is due to be presented to the Oil and Gas Conservation Commission on Tuesday.
