Promoting Energy Infrastructure, Creating Opportunities, and Enhancing Reliability

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