Promoting Energy Infrastructure, Creating Opportunities, and Enhancing Reliability Business Continuity Strategies Houston, TX November 9-10, 2006
Agenda WPA – what are we? National production history, forecast Wyoming and Colorado specific Pipeline infrastructure Socioeconomic impacts Other commodities
Source: 10/30/06 Raymond James
Source: EIA
Regional Natural Gas Production is Growing 260 MMcfd/yr (Note: much of CO production comes from the San Juan Basin) Source: EIA 8,496 MMcfd 8,754 MMcfd 8,955 MMcfd
Wyoming Natural Gas
Colorado Natural Gas
Garfield County, Colorado Colorado Oil and Gas Commission
Natural Gas Infrastructure
1997 Source:EIA
Gas Infrastructure Added in Last 5 years MidAmerican Kern 1,052 MMcfd El Paso Cheyenne Plains 770 MMcfd William’s Northwest 175 MMcfd El Paso CIG 50 MMcfd WBI Grasslands 80 MMcfd Total of 2.1 Bcfd of export capacity added in the Rockies over the past 5 yrs (pre REX)
Current Constraints Wamsutter to Cheyenne Nearly all Export Points
El Paso Cheyenne Plains Kinder Pony Express Kinder Trailblazer WBI Grasslands Kern River NWP PNW NWP SJB Kinder TransColorado Southern Star
Approximate Pipeline Capacity Out of the Rockies on Certificated Cap (X 1000)MMBtu/day Flowing (X 1000)MMBtu/day MidAmerican Kern1,729*2,032 William’s NWP PNW William’s NWP South349 Kinder TransColorado Kinder Trailblazer El Paso Cheyenne Plains El Paso CIG330 Southern Star190 Kinder Morgan Pony WBI Grasslands80 Total Major Pipe Export5,577 (6,148) 5,793 *2,300 Available
Note That Winter Demand in the Rockies is Substantial Peak Day > 3.5 Bcfd Denver Salt Lake City
Note That Storage Injections in the Summer Help Augment Pipeline Takeaway Capacity Clay Basin Storage (Questar) Elk Basin Storage (WBI) Young Storage (XCEL/El Paso) Fort Morgan Storage (El Paso) Huntsman Storage (Kinder) Clear Creek Storage (Questar) …………..
THE FUTURE! 1.8 Bcfd 42 –inch diameter 1,323 Miles
WIC Piceance Lateral REX Zone 1 (formerly Entrega) Questar Overthrust WIC Mainline
Storage Opportunities
Socioeconomic impacts
Energy Price Sensitivity Crude Oil [ $0.25 per bbl. change ] ± $1.6 million revenue change. Coal [ $0.25 per ton price change ] ± $13.6 million revenue change. Natural Gas [ $0.25 per mcf change ] ± $50.7 million revenue change. Note: revenue sources include severance taxes, federal mineral royalties, and the school foundation portion of ad valorem taxes (based on FY06 projections). Source: January 2006 CREG Forecast and Legislative Services Office. Wyoming Economic Analysis Division
Current Economic Conditions Upside - Energy continues to bolster the economy! Net population in-migration last 4 years. Jobs, jobs, jobs!!! 8,800 (3.4%) between April 2005 to April Consumer spending continues to climb. Retail sales taxes up 14% from year ago. State revenue out-pacing forecast. General Fund ahead 7.4% ($65 million). Gross State Product soars in GSP increased 7.6% to $24 billion; ranked 12 th in U.S. (6.7%). Wyoming Economic Analysis Division
Current Economic Conditions Downside: Influx of workers stress communities. Increases traffic, domestic violence, drug use, 911 emergency services. Housing shortage: escalating property values, affordable housing becoming non-existent. Lodging shortage – accommodations for travelers short supply. Population: low growth and net in-migration. Transient versus permanent population. Uneven growth: energy boom is spreading wealth unevenly across state. Low industrial diversification. Workforce availability: strong regional competition for construction labor/ in-state competition from growing mining industry. 4Q05 inflation hits 5%; U.S. at 3.4% Wyoming Economic Analysis Division
Wyoming Job Growth Outlook: 8,400 New Jobs in ,200 6,100 2,500 2,100 5,400 7,600 8,400 Forecast Wyoming Economic Analysis Division
Investing in the future… Education is top priority: $400 million Hathaway Scholarship Program. $105 million endowed professorships $2 billion K-12 education funding. Other: $564 million Permanent Wyoming Mineral Trust Fund. $100 million tax cut (sales tax on groceries.) $40 million Wildlife Trust Fund (conservation grants, habitat improvement.) Infrastructure increased bonding authority from $1 billion to $3 billion. Capital improvements – schools, prison, state buildings. Wyoming Economic Analysis Division
Other commodities
Crude Oil Prices have rebounded since Spring 06. Pipeline infrastructure is tight but no consensus on new outlets – let’s talk! Refining expansions and new refining initiatives are expensive and have lengthy permitting lead times. Production continues to grow in the region.
CO2 Infrastructure and Announced Advanced Coal Sites
Colby Drechsel Associate Director North Durbin Street, Suite 230 Casper, Wyoming Office (307) Fax (307)