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Promoting Energy Infrastructure, Creating Promoting Energy Infrastructure, Creating Opportunities, and Enhancing ReliabilityOpportunities, and Enhancing Reliability
Business Continuity StrategiesBusiness Continuity Strategies
Houston, TX Houston, TX
November 9-10, 2006November 9-10, 2006
AgendaAgenda
• WPA – what are we?
• National production history, forecast
• Wyoming and Colorado specific
• Pipeline infrastructure
• Socioeconomic impacts
• Other commodities
6.458
5.705
2.140
5.4055.515
5.280
6.650
6.930
6.610
7.240
11/8/06
Date, WY Export (Bcfd), % WY Pipeline Contracted
4.668 95%10/22/2006
Source: 10/30/06Raymond James
Marketed Natural Gas Production (Bcfd)
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 Jun-06
West Producing East U.S. Total
-2.88
-1.07
+2.51
Source: EIA
Regional Natural Gas Production is Regional Natural Gas Production is Growing 260 MMcfd/yrGrowing 260 MMcfd/yr
(Note: much of CO production comes from the San Juan Basin)(Note: much of CO production comes from the San Juan Basin)
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
Mcfd
2004 2005 Mar-06
Utah
Colorado
Montana
N Dakota
Wyoming
Source: EIA
8,496 MMcfd
8,754 MMcfd
8,955 MMcfd
Wyoming Natural GasWyoming Natural Gas
First Year Natural Gas Production, Jonah-Pinedale, WY
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000Ju
l-01
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Mcfd
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
Pre-1990 Total (Mcfd)
Updated Oct 30, 2006 (Data accurate through July 1, 2006)
CBM, Powder River Basin TotalUpdated Oct 16, 2006 (Data accurate through June 1, 2006)
600
650
700
750
800
850
900
950
1,000
1,050
Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06
MMcfd
CBM Production, Upper Powder River Drainage
0
50
100
150
200
250
300
350
400
450
J un-01 J un-02 J un-03 J un-04 J un-05 J un-06
MMcfd
Updated Oct. 16, 2006 (Data accurate through J une 1, 2006)
Colorado Natural GasColorado Natural Gas
Garfield County, ColoradoGarfield County, Colorado
0100,000200,000300,000400,000500,000600,000700,000800,000900,000
Mcf
d
2000 2001 2002 2003 2004 2005 May-06
Colorado Oil and Gas Commission
Natural Gas InfrastructureNatural Gas Infrastructure
1997
Source:EIA
WBIGrasslands80 MMcfd
El PasoCIG
50 MMcfd
William’sNorthwest175 MMcfd
El PasoCheyenne
Plains770 MMcfd
MidAmericanKern
1,052 MMcfd
GasInfrastructure Added in Last
5 years
Total of 2.1 Bcfd of export capacity added in the Rockies over the past 5 yrs (pre REX)
Current ConstraintsCurrent Constraints
• Wamsutter to Cheyenne
• Nearly all Export Points
El Paso Cheyenne Plains
Kinder Pony Express
Kinder Trailblazer
WBI Grasslands
Kern River
NWP PNW
NWP SJBKinder TransColorado
Southern Star
Approximate Pipeline Capacity Out of the Rockies on 9-12-2006Approximate Pipeline Capacity Out of the Rockies on 9-12-2006
Certificated Cap
(X 1000)MMBtu/day
Flowing
(X 1000)MMBtu/day
MidAmerican Kern 1,729* 2,032
William’s NWP PNW 653 643
William’s NWP South 349 349
Kinder TransColorado 375 367
Kinder Trailblazer 846 875
El Paso Cheyenne Plains 770 693
El Paso CIG 330 330
Southern Star 190 190
Kinder Morgan Pony 255 234
WBI Grasslands 80 80
Total Major Pipe Export 5,577
(6,148)
5,793
*2,300 Available
Note That Winter Demand in the Note That Winter Demand in the Rockies is SubstantialRockies is Substantial
Peak Day > 3.5 BcfdPeak Day > 3.5 Bcfd
DenverDenver
Salt Lake CitySalt Lake City
Note That Storage Injections in the Note That Storage Injections in the Summer Help Augment Pipeline Summer Help Augment Pipeline
Takeaway CapacityTakeaway 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!THE FUTURE!
1.8 Bcfd1.8 Bcfd
42 –inch diameter42 –inch diameter
1,323 Miles1,323 Miles
•WIC Piceance Lateral
•REX Zone 1 (formerly Entrega)
•Questar Overthrust
•WIC Mainline
Storage OpportunitiesStorage Opportunities
Socioeconomic Socioeconomic impactsimpacts
Energy Price SensitivityEnergy 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 ConditionsCurrent Economic ConditionsUpside - 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 2006.• 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 2004.
• GSP increased 7.6% to $24 billion; ranked 12th in U.S. (6.7%).
Wyoming Economic Analysis Division
Current Economic ConditionsCurrent 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
'70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04300,000
325,000
350,000
375,000
400,000
425,000
450,000
475,000
500,000
525,000
550,000
Po
pu
lati
on
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
20,000
Ne
t Mig
ratio
n
Population Net Migration
Wyoming Population and Net Migration: 1970 to 2005
Source: U.S. Census Bureau Prepared by Wyoming Economic Analysis Division
Net Migration = Inmigration - Outmigration
2000 2001 2002 2003 2004 2005 2006
Mining Other
Wyoming Job Growth Outlook:Wyoming Job Growth Outlook:8,400 New Jobs in 20068,400 New Jobs in 2006
6,200 6,100
2,5002,100
5,400
7,6008,400
ForecaForecaststWyoming Economic Analysis Division
Investing in the future…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 commoditiesOther commodities
Crude OilCrude 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 CO2 Infrastructure and Announced Advanced Coal SitesCoal Sites
www.wyopipeline.comwww.wyopipeline.comColby DrechselColby Drechsel
Associate DirectorAssociate Directorcdrechsel@qwest.netcdrechsel@qwest.net
307.259.8459307.259.8459152 North Durbin Street, Suite 230 152 North Durbin Street, Suite 230
Casper, Wyoming 82601Casper, Wyoming 82601Office (307) 237-5009Office (307) 237-5009Fax (307) 237-5242Fax (307) 237-5242
www.wyopipeline.comwww.wyopipeline.com