|
Lessons for Alaska from Wyoming? Wyoming’s gas authority has $1 billion in bonding authority to aid in infrastructure growth; goal to increase gas exports Kristen Nelson Petroleum News Editor-in-Chief
Both Wyoming and Alaska have state gas authorities, and the director of the Wyoming agency was in Anchorage Sept. 1 to explain what his agency does to a joint meeting of the Alaska Legislative Budget and Audit and Senate Resources committees.
Bryan Hassler, executive director of the Wyoming Natural Gas Pipeline Authority, said the Wyoming agency was established because the lack of pipeline infrastructure out of the state created a price differential of about 50 cents a thousand cubic feet for Wyoming natural gas compared to national prices.
The Wyoming authority was established in 1979, but has only had paid staff in the last two years.
The agency’s goal, Hassler said, is to increase the state’s export of natural gas from approximately 4 billion cubic feet a day to approximately 6 bcf a day over the next four to five years. As pipeline capacity out of the state increases, the price of Wyoming gas more closely matches national prices, increasing revenues to the state from both the price increase and from the volume increase, and creating an opportunity for more resource development. $1 billion in bonding authority The authority has $1 billion in bonding authority “to build or cause to be built” infrastructure that will increase the netback from natural gas sales to the state. The authority can build or lease capacity on projects owned by others, and can also acquire natural gas supplies to fulfill capacity commitment and provide conduit financing.
Hassler noted that both the Wyoming Natural Gas Pipeline Authority and the Alaska Natural Gas Development Authority were “established to promote the development of their respective state’s natural resources, were designed to be self supporting, the authorities can take ownership in a project and each authority can issue both tax-exempt and taxable bonds.”
Unlike the Alaska authority, Wyoming’s authority does not need legislative approval to issue bonds: it is authorized to issue up to $1 billion in bonds.
The board had operated without any permanent staff, but in 2002 the Legislature loaned it some $270,000-$280,000, and Hassler was hired as executive directory. Another $1.7 million loan has been authorized by the Legislature, he said, in response to a new budget, and the authority now has a staff of four including two technical analysts and an administrative assistant, and money for bond counsel that the authority might need over the next two years to put together pipeline infrastructure projects.
“It is our intention to be self-supporting,” he said, and the authority has five years to repay its loan. Not enough infrastructure Unlike the North Slope of Alaska, where natural gas is stranded, Wyoming gas development is strangled: The problem the authority was designed to address is that the pipeline system in the central Rocky Mountains is too small to handle the resource, which means the gas supply is both underutilized and undervalued. In the area of Opal, Wyo., Hassler said, there is an estimated resource of 171 trillion cubic feet, but infrastructure only handles some 1.5 to 1.7 bcf a day. The infrastructure in the area, he said, is “very anemic for the potential resource base.”
Asked by Sen. Lyman Hoffman, D-Bethel, about the life expectancy of Wyoming’s gas, Hassler said that with a potential resource of 170 trillion cubic feet, with 1.3 tcf a year produced from the state, “there’s a 170-year reserve life at existing production rates.”
If the infrastructure were developed, he said, the state thinks it could grow from 4-4.2 billion cubic feet a day currently, to 6 bcf a day over the course of five years. “Wyoming could in all rights be able to produce 10 to 12 bcf a day of natural gas resource” if the resource base were fully developed over the next 10 to 12 years, he said.
| 