The nation's credit crisis has curtailed interest in aggregating mineral holdings among small natural gas companies in order to back new pipeline export capacity.

Wyoming Pipeline Authority executive director Brian Jeffries said during a public meeting Tuesday in Casper that aggregating small producers is one way to help speed up pipeline investment and avoid millions in lost state revenue when production overruns export capacity.

Jeffries said two entities expressed interest in pursuing the idea in Wyoming, but they backed off recently due to the credit crisis.

"This is not an entirely new concept. But the timing and the credit crunch has thrown it off track," said Jeffries.

Wyoming lawmakers and Gov. Dave Freudenthal remain cool to the idea of the state securing a long-term pipeline contract in order to aggregate small natural gas producers. Jeffries said that as an alternative, a company may be able to aggregate small producers based on anticipated production from the total of their mineral holdings.

Wyoming lost an estimated $340 million in natural gas revenue last year when production outpaced pipeline export capacity out of the Rockies, according to data provided by the state's economic analysis division. Wyoming Pipeline Authority officials expect the same thing will happen in 2010 before a number of new proposed pipelines will come into service.

There may be one bright spot in the credit crisis for pipeline developers, however. Demand for steel has eased, and developers who still have financial backing are hoping prices fall.

Jane Harrison of Sunstone Pipeline said if the price of steel drops even $100 per ton, it would shave $40 million off the estimated $2.3 billion price of the 600-mile pipeline from Wyoming to Oregon.

"The silver lining is that the cost of pipe and other materials might go down," Harrison told the Wyoming Pipeline Authority.

However, even if the cost of building materials declines on the world economic slump, it may be only temporary. Ever since it was reactivated in 2002, the Wyoming Pipeline Authority has had a goal of keeping wholesale natural gas prices in Wyoming within 50 cents of the price at Henry Hub in Louisiana.

Jeffries said the trend toward higher costs for building materials means transporting commodities from Wyoming to long-distance markets will only become more and more expensive, and keeping Wyoming natural gas within 50 cents of Henry Hub becomes less likely.

Contact energy reporter Dustin Bleizeffer at (307) 577-6069 or dustin.bleizeffer@trib.com

BREAKOUT

Development stage

Several proposed pipeline construction projects aimed at marketing Rocky Mountain natural gas are in various stages of development. However, officials expect that some proposals will win out over others, so some proposals may not come to fruition.

PROJECT: Sunstone Pipeline.

PLAYERS: Williams and Northwest Pipeline.

ROUTE: 600 miles from Opal gas plant in western Wyoming to Stanfield, Ore.

CAPACITY: 1.2 billion cubic feet per day.

EST. COST: $2.3 billion.

IN SERVICE: November 2011.

STATUS: "Commitments" are in place for two-thirds of the capacity.

COMMENTS: Sunstone officials argue that Rockies gas producers can get a better price for their natural gas by taking it to the northwest, where Canadian supplies are dwindling. "They're clamoring for Rockies gas," said Jane Harrison of Sunstone. Oregon and Washington both have aggressive renewable portfolio standards that increase demand for gas-fired electrical generation.

PROJECT: Ruby Pipeline.

PLAYERS: El Paso.

ROUTE: 600 miles from Opal gas plant in western Wyoming to Malin, Ore.

CAPACITY: 1.3 billion cubic feet per day.

EST. COST: $3 billion.

IN SERVICE: March 2011.

STATUS: "Commitments" are in place for more than 1.1 Bcfpd.

COMMENTS: California utility PG&E must replace declining natural gas supplies from Canada, and is seeking 375 million cubic feet of gas per day on the Ruby Pipeline, or about 29 percent of the pipeline's initial capacity. The pipeline would be a "carbon neutral" facility through purchases of renewable energy credits and efficiency designs, according to Ed Miller of Ruby Pipeline.

PROJECT: Bison Pipeline.

PLAYERS: TransCanada Pipeline USA Ltd.

ROUTE: 289 miles from Wyoming's Powder River Basin to Morton County, N.D.

CAPACITY: 400 million cubic feet per day (Mmcfpd).

EST. COST: N/A.

IN SERVICE: Late 2010.

STATUS: Securing shipping commitments.

PROJECT: Pathfinder Pipeline.

PLAYERS: TransCanada Pipeline USA Ltd.

ROUTE: 625 miles from Meeker, Colo., through Montana and North Dakota to the Chicago market.

CAPACITY: 1.2 billion cubic feet of gas per day.

EST. COST: N/A.

IN SERVICE: Late 2010.

STATUS: Securing shipping commitments.

COMMENTS: An anchor shipper slated to fill 500 million cubic feet of gas per day on the pipeline recently backed out. The project could be reconfigured to connect from Meeker, Colo., to the Bison Pipeline in Wyoming's Powder River Basin, according to Dick Shepherd of Northern Border Pipeline.

PROJECT: Rockies Alliance.

PLAYERS: Alliance Pipeline Inc. and Questar.

ROUTE: 800 miles from Wamsutter through Montana and North Dakota to the Chicago market.

CAPACITY: 1.3 billion cubic feet.

EST. COST: $5 billion.

IN SERVICE: November 2012.

STATUS: Securing commitments for capacity.

Several proposed pipeline construction projects aimed at marketing Rocky Mountain natural gas are in various stages of development. However, officials expect that some proposals will win out over others, so some proposals may not come to fruition.

PROJECT: Sunstone Pipeline.

PLAYERS: Williams and Northwest Pipeline.

ROUTE: 600 miles from Opal gas plant in western Wyoming to Stanfield, Ore.

CAPACITY: 1.2 billion cubic feet per day.

EST. COST: $2.3 billion.

IN SERVICE: November 2011.

STATUS: "Commitments" are in place for two-thirds of the capacity.

COMMENTS: Sunstone officials argue that Rockies gas producers can get a better price for their natural gas by taking it to the northwest, where Canadian supplies are dwindling. "They're clamoring for Rockies gas," said Jane Harrison of Sunstone. Oregon and Washington both have aggressive renewable portfolio standards that increase demand for gas-fired electrical generation.

PROJECT: Ruby Pipeline.

PLAYERS: El Paso.

ROUTE: 600 miles from Opal gas plant in western Wyoming to Malin, Ore.

CAPACITY: 1.3 billion cubic feet per day.

EST. COST: $3 billion.

IN SERVICE: March 2011.

STATUS: "Commitments" are in place for more than 1.1 Bcfpd.

COMMENTS: California utility PG&E must replace declining natural gas supplies from Canada, and is seeking 375 million cubic feet of gas per day on the Ruby Pipeline, or about 29 percent of the pipeline's initial capacity. The pipeline would be a "carbon neutral" facility through purchases of renewable energy credits and efficiency designs, according to Ed Miller of Ruby Pipeline.

PROJECT: Bison Pipeline.

PLAYERS: TransCanada Pipeline USA Ltd.

ROUTE: 289 miles from Wyoming's Powder River Basin to Morton County, N.D.

CAPACITY: 400 million cubic feet per day (Mmcfpd).

EST. COST: N/A.

IN SERVICE: Late 2010.

STATUS: Securing shipping commitments.

PROJECT: Pathfinder Pipeline.

PLAYERS: TransCanada Pipeline USA Ltd.

ROUTE: 625 miles from Meeker, Colo., through Montana and North Dakota to the Chicago market.

CAPACITY: 1.2 billion cubic feet of gas per day.

EST. COST: N/A.

IN SERVICE: Late 2010.

STATUS: Securing shipping commitments.

COMMENTS: An anchor shipper slated to fill 500 million cubic feet of gas per day on the pipeline recently backed out. The project could be reconfigured to connect from Meeker, Colo., to the Bison Pipeline in Wyoming's Powder River Basin, according to Dick Shepherd of Northern Border Pipeline.

PROJECT: Rockies Alliance.

PLAYERS: Alliance Pipeline Inc. and Questar.

ROUTE: 800 miles from Wamsutter through Montana and North Dakota to the Chicago market.

CAPACITY: 1.3 billion cubic feet.

EST. COST: $5 billion.

IN SERVICE: November 2012.

STATUS: Securing commitments for capacity.]]->