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University of Wyoming

Greenwire
Wednesday, April 26, 2006

Wyo. officials mull how to boost low Rocky Mountain oil prices

The Wyoming Pipeline Authority yesterday proposed expanding pipeline capacity or converting a natural gas pipeline to carry crude oil as solutions to the issue of low prices for oil produced in Rocky Mountain states.

The governors of Montana, Wyoming and North Dakota discussed the problem last week in Billings, Mont., and yesterday's meeting was to promote discussions by energy industry officials, said WPA Director Bryan Hassler.

If Enbridge Energy Partners expanded its pipeline, he said, capacity could increase by 30,000 barrels per day by mid-2007. And Kinder Morgan and Sempra Energy's 1,323-mile natural gas pipeline from Wyoming to Ohio, to be completed in 2009, could pave the way for Kinder Morgan's Pony Express natural gas line to switch back to carrying oil.

Wyoming Gov. Dave Freudenthal (D) announced yesterday he was forming a task force to address the pricing disparity, which is caused in part by growing competition from Canadian oil, temporary reductions in refining operations and pipeline capacity shortage.

Freudenthal's panel could include Colorado, Montana, North Dakota, South Dakota, Utah and the Province of Alberta, as well as the Energy Department and the Federal Energy Regulatory Commission. It will offer preliminary recommendations at an Interstate Oil and Gas Compact Commission meeting May 21-23 (Jennifer Byrd, AP/Billings Gazette, April 25).

Tad True of Belle Fourche Pipeline Co. and Bridger Pipeline LLC, testifying at yesterday's WPA meeting, said industry stakeholders needed to start expanding now

"If nothing happens, the geographic market risk will stay as it is today ... and a year from now crude oil in the Rocky Mountains will still be getting a discount" of $20 to $30 less per barrel than the world price, True said. "If I'm an investor I wouldn't want to invest in Wyoming, Montana or North Dakota" (Dustin Bleizeffer, Casper [Wyo.] Star-Tribune, April 26). -- DK

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