why pipelines are important to wyoming - Wyoming Pipeline Authority
Transcript of why pipelines are important to wyoming - Wyoming Pipeline Authority
Wyoming Revenue
• Revenue to State of Wyoming from mineral production for
2006 = $2,307,397,038
(Includes: ad valorem, severance, sales & use taxes, US rent & royalty returns, State rents & royalties, General Fund income
Includes: oil, gas, coal, uranium, trona, other solid minerals)
Coal, Natural Gas, Coal Gasification
$0
$10
$20
$30
$40
$50
$60
0
2,000
4,000
6,000
8,000
10,000
12,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
US$
Bill
ions
Mill
ions
of M
MB
tue
Year
Production and Price Comparison of Wyoming Coal, Coal Gasified into Methane1 after 1997, and Natural Gas
Energy EquivalentsCoal (Million MMBtue)
Methane (Million MMBtue)
Methane Value (US$Billions)
Coal Value (US$Billions)
Coal Value in terms of methane price (US$Billions)$ Derivatives from
Energy Price SensitivityCrude Oil - $1.00/bbl change
+/- $6 million revenue change
Coal - $.25/ton change+/- $14 million revenue change
Natural Gas - $0.10/mcf change+/- $23 million revenue change
Source: Wyoming Economic Analysis Division
Pipeline Impacts
• 93% of WY natural gas production is exported out of state
• Without capacity: prices lower, production is shut in, drilling is curtailed and revenues are decreased
• Rockies Express Pipeline – if built one year sooner would have resulted in an additional $430 million revenue
Rockies Express Pipeline-In-service
Rockies Express Pipeline-REX East
Lease of Overthrust Pipeline Capacity
Natural Gas Pipeline Company of America
Kinder Morgan Interstate Gas Transmission
TransColorado Gas Transmission
Trailblazer Pipeline
REX Compressor Station
REX East Compressor Station
Hub
OpalKanda Wamsutter
GreasewoodMeeker
Blanco
Cheyenne Lebanon
Clarington
OVER-THRUST
CAPACITYLEASE
R O C K I E S E X P R E S S P I P E L I N EREX EASTREX
IN-SERVICE
1,800,000 Dth/d - 7/20091,500,000 Dth/d - 2/2008 1,600,000 Dth/d - 1/2009
PIPELINE – 1,679 MILES COMPRESSION – 460,000 Hp
Production Vs Pipeline Capacity
3
4
5
6
7
8
Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09
Bcf
d
Natural Gas Interstate Pipeline Export Capacity vs. Production for Wyoming
REX
WBI Grasslands ExpansionPipeline Export Capacity
Wyoming Saleable ProductionWSP + Garfield Co., CO
21% increase, Kern River Expansion
14% increase, Cheyenne Plains
3.8
4.865
5.8 5.84
7.34
26% increase, REX
3% increase, Grasslands
How do pipelines get built?• Pipeline companies research & prepare
production/capacity forecasts• Start discussions with natural gas producers,
end users, utilities, etc to determine demand• Develop a project: Route/ROW, Size, Cost
Estimates & Rate Estimates, Start Permitting/Environmental Review
• Hold an Open Season
Ruby Pipeline
Malin
Opal Hub
U T A H
N E V A D A
O R E G O N
C O L O R A D O
I D A H O
C A L I F .
W Y O M I N G
CIG
Kern River
Paiute
Tuscarora
PG&E
GTN
Ruby PipelineOpal to Malin
WIC
CheyennePlains
Cheyenne
UintaBasin
PiceanceBasin
Wyoming Citizens
• Every Wyoming citizen should be concerned with pipeline capacity because:
It has direct effect on State revenues and thus State spending on projects and programs
It effects prices so the mineral and surface owners as well as the State does not receive full value for a nonrenewable resource