Energy Supply Opportunities: the Economic Advantage for

Northeast Wyoming

Campbell County Economic Development Corporation, Wednesday, May 11th, 2005, Gillette, WY

Presented by Marc Strahn, Board Member of the Wyoming Natural Gas Pipeline Authority

The Wyoming Pipeline Authority Energy DEMAND - it’s not a science

fiction movie PRB Resources

THINK OUTSIDE THE BOX Planning for the future – areas where

you can influence the outcome

Bryan Hassler -- Executive Director

Carla Hubbard – Administrator

Gregg Detweiller – Technical Analyst

Colby Drechsel – Technical Analyst

                                                                                                                                                                         

 

Board MembersBoard Members:

Mark Doelger - Chairman 

Marc Randal Strahn - Vice Chairman

 Duane Zavadil - Board Member

 Jim Nielson - Board Member

Jim Peck - Board Member

Kern River ‘smart pig’ launching station adjacent to the Opal Processing Station

Cheyenne Plains

Natural Gas Production, Consumption, and Imports,1970 - 2025 (trillion cubic feet)

0

5

10

15

20

25

30

35

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Consumption

Production

Net Imports

History Projections

0

1

2

3

4

5

6

Pipeline Liquefied Natural Gas

Natural Gas Net Imports, 2002 and 2025(trillion cubic feet)

2002

2025

PRB resources

Coal – approx. 1,021,000 short tons per day (WY #1 producer in the Nation or approximately 35% total U.S. production – runner up was W.V. at 13%)

Campbell, Converse, and Sheridan Counties yield 96% of the coal mined in the State of Wyoming

CBM derived natural gas – approx. 850,000 Mcfd (18% of the total natural gas produced in the State of Wyoming)

Oil – 36,080 BOPD Uranium – 1.2 million pounds/y

yellowcake CO2 – power plants?????

On a national level,

Vintage Natural Gas Decline by First Year of Production

Campbell County, WY

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Jan-

97

Jul-9

7

Jan-

98

Jul-9

8

Jan-

99

Jul-9

9

Jan-

00

Jul-0

0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Gas

Prod

uctio

n - M

ean

(Mcf

/d)

Pre-1997 1997 1998 1999 2000 2001 2002 2003 2004

Natural gas related developments for northeast WY

Continued CBM development Northern Border Partners, L.P. ‘Bison Pipeline

Project’: 300 miles of 24-30" pipe from Deadhorse, WY near Gillette, WY to their CS 6 compression station near Hebron, ND to transport 250,000 to 500,000 Mcfd. In service November 2006. In the planning stages depending on Powder River Basin production.

Questar’s Wamsutter to Gillette, WY tying into Bison Pipeline Project terminus. 245 miles of 24-30" pipe providing up to 500,000 Mcfd capacity. In service mid to late 2007.

Revenue($) Generated by the Sale of Natural Gas

Produced from Campbell County, WY

$24,932,982

$30,176,191

$14,749,287

$18,953,260

$69,757,875

$82,947,577

$69,073,085

$81,451,756

$0

$10,

000,00

0

$20,

000,00

0

$30,

000,00

0

$40,

000,00

0

$50,

000,00

0

$60,

000,00

0

$70,

000,00

0

$80,

000,00

0

$90,

000,00

0

2003

2004

Federal Royalty State Royalty State Severance County Ad valorem

Outside of the box?

Coal-fired power plants utilize only 1/3 of the energy produced from burning coal; conversely, coal gasification can raise this amount to nearly 50%.

Coal gasification can generate saleable hydrogen and simplifies and lowers the cost of carbon dioxide capture - used for tertiary oil recovery methods

Developing and exporting raw hydrogen and/or hydrogen fuel cell technology GM has already spent $1 billion on developing hydrogen fuel cells and

has made statements that if a car were built in high volume, they could have a cost competitive vehicle by 2010.

Rolls Royce announced it will invest $75 million to develop a hydrogen fuel cell replacement for gas and diesel generators.

The number of companies investing in hydrogen fuel cell technology continues to increase.

cont’d

Coal liquefaction – theoretically, FTD netback at $40/Bbl. (20% return on investment) with the following parameters: export 10,200 BOPD, 104 MW power, consuming 7650 tons per day of coal and 240 gpm water. CAPEX of $740 million, OPEX w/out coal $48 million/y, 182 fulltime employees, 1500 employees during peak construction over a 2 year time frame (RENTECH, April 15, 2005)

Support the incentives that will promote new technology higher education institutions training facilities Examples – McMurray Training Center

Your competitors – LNG, Canada, Alaska

Production and Price Comparison of Wyoming Coal, Coal Gasified into

Methane1 after 1998, and Natural Gas Energy Equivalents

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year

Mil

lio

ns

of

MM

Btu

e

$0

$5

$10

$15

$20

$25

US

$Bil

lio

ns

Coal (MillionMMBtue)

Methane(MillionMMBtue)

Coal Value interms ofmethane price(US$Billions)

Coal Value(US$Billions)

Methane Value(US$Billions)

1 Efficiency = 70%

$ Derivatives from Gasification $

Source: Wyoming State Geological Survey, Wyoming Geo-Notes, Number 78, Nov. 2003, p. 1, Figs 1,2. Personal communication Rod.

WPA Services

Energy related data research and interpretation Infrastructure consulting Policy/planning development Government/Public Affairs services Technical support Annual subscription or by special project

VISIT US!

THE WYOMING NATURAL GAS PIPELINE AUTHORITY

WWW.WYOPIPELINE.COM

Bryan Hassler - Executive DirectorE-mail – uep1@comcast.net

Office (303) 748-6473Fax (303) 948-1428

Carla Hubbard – AdministratorE-mail – wyomingpipelinea@qwest.net

152 N. Durbin Street – Suite 230Casper, Wyoming 82601

Office (307) 237-5009