Wyo customers don't get break from state's gas production

[TransitJohn]

Wyo customers don't get break from state's gas production

By DUSTIN BLEIZEFFER
Star-Tribune energy reporter Monday, October 17, 2005

GILLETTE -- Throw a rock in Wyoming, and you might hit a gas well -- or someone on his way to go drill a new gas well.

Considering the state's relatively sparse population, there's about one natural gas well for every 15 people. With that kind of proximity, it would seem Wyomingites should be the last people in the nation concerned about spiking home heating bills this winter.

Not so.

This week the Wyoming Public Service Commission granted a 73 percent increase for customers of Wyoming Gas Co. in the Big Horn Basin, and the forecast for other natural gas customers across Wyoming is much the same.

Natural gas producers don't connect their wells directly into Wyoming homes. Instead, they connect them to a national network of pipelines. Simply put, producing natural gas and piping into homes are two different businesses separated by a sea of regulation.

"The distribution companies make their money off of building the pipes that deliver the natural gas to the burner tip, and their allowed rate of return is strictly regulated by the Wyoming Public Service Commission," said Bryan Hassler, executive director of the Wyoming Natural Gas Pipeline Authority.

The profit margin for natural gas distribution utilities is based in investment in distribution facilities. That margin is usually in the 8 percent to 11 percent range in Wyoming, according to PSC Chairman Steve Furtney.

As for the actual natural gas commodity, utilities pass on the price to customers dollar for dollar.

Two businesses

The Natural Gas Pipeline Authority is a quasi-governmental arm of the state given $1 billion in bonding authority to help finance construction of pipelines that export Wyoming gas. The idea is that with adequate access to national markets, Wyoming gas producers can get top dollar for their commodity and generate more revenue to state coffers.

This month, the authority announced its intention to pledge all $1 billion of its bonding authority to a $3 billion main line to Ohio. The project is being spearheaded by Kinder Morgan Energy Partners and Sempra Energy. That announcement drew questions from many Wyomingites about the possibility of returning the favor by cutting rates to Kinder Morgan gas customers in the state.

But that won't happen, according to state and Kinder Morgan officials, because Kinder Morgan Inc. the natural gas distribution company, and Kinder Morgan Energy Partners the pipeline company, are two separate companies under two separate regulatory authorities.
**snip**

http://www.casperstartribune.net/articles/2005/10/17/news/wyoming/c7030ae9c57ccdf18725709c002111f1.txt

[harlinchi]

1. Sounds like Iraqi's paying for gasoline!

Maybe they'll start chargin' the Saudis top-dollar for sand!

[TransitJohn]

2. Apt comparison

You wouldn't believe the gas drilling here...I'm a geologist working wellsite in production....I turn down work all the time...no I get to pay double what I did last winter to heat my home, which I am never in because there's so much work.

:banghead: :wtf: :mad:

[harlinchi]

3. Doesn't Alaska have energy revenues for distribution to Alaskans?

I thought I heard of significant dollars being distributed to their population!

[oneighty]

5. You beat me to it

And yes they do. The Alaska Permanent Fund. Google it, very interesting.

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[oneighty]

4. Wyoming citizens

should consult with the managers of the Alaska Permanent Fund and how they found a way to profit from their natural resources under their land.

Like man "This land is our land" sort of thing.

Some might call it socialism.

I call it smart.

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[TransitJohn]

6. Yeah, but I'm not betting that

the Republican nutjobs who let all the lobbyists write the bills at the Hitching Post in Cheyenne will be amenable to giving any money back to us. They are totally in it for big business.

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State surplus hits record $1.86B

By ROBERT W. BLACK
Star-Tribune capital bureau

CHEYENNE -- By anyone's account, it's a whopper. Wyoming's surplus is estimated at $1.86 billion, which would shatter the previous record, $1.22 billion, set in 2004. The windfall is about the same as the cost of two years' worth of state government, and twice the amount of last year's surplus.

"We had a lot before, and now I guess we have a bigger lot," Gov. Dave Freudenthal said Friday after state budget officials released the latest revenue projections for fiscal 2007 and 2008.

"The numbers reflect the increased (minerals) activity in the state. Frankly, the fact that the numbers are larger than they were won't change the way I put the budget together. I'm going to put the budget together based on what's needed, not on what's available."

Budget surpluses have been common this decade after the state limped toward the new millennium with a projected $127 million deficit. Mineral prices, particularly for oil and natural gas, then turned around -- but nothing like the hikes seen the past few months.

Mike McVay, administrator of the state Budget Division, cautioned that the numbers are preliminary. The surplus does not account for new spending requests from the state's 106 agencies, now totaling $925 million.

He and the governor are still reviewing those requests. Freudenthal will present his recommendations to lawmakers Dec. 1. The Legislature will have final say; its budget session begins Feb. 13.
**snip**
http://www.casperstartribune.net/articles/2005/10/15/news/0171b43a673dc2288725709a0083c187.txt
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We the people will never see any of this money...it'll go to shareholders.

[oneighty]

7. 1.86 billion

invested in the stock market ought to keep Wyoming citizens taxes down at the very least.

Now that would be a good investment?

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[TransitJohn]

8. Well, there almost aren't any taxes

No state income tax....very low (4-6%) sales tax...and property taxes that are lower than surrounding states. And the total in the Permanent Mineral Trust Fund is a lot more than $1.86B......A LOT MORE.

[oneighty]

9. Trust fund.

And where does that money go?

I just researched my state--$335 million in gas and oil production in 2004. I would have thought it to be more. In my area there are plenty of gas wells. Those people fortunate to have them on their property do get free gas and to my surprise other arrangements/partnerships with drilling companies are available to land owners.

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[TransitJohn]

10. I guess you're not too familiar with the west.

We have what's called the "split estate." When landowners acquired their land under the various homestead acts a LONG time ago, the federal government retained all of the subsurface minerals, which are still subject to the Mining Law of 1872 (basically, given away to corporations)...so their isn't much "partnership" going on with the corporations...you must grant them access the minerals if they lie beneath "your" land. And, btw...drilling companies don't own the minerals...they merely provide the service of drilling...sinking the hole.

[oneighty]

11. No I am not

I do not know much about mine. Except the property in this area was surveyed by Holland Land Company. I think they retained the mineral rights. I was a rod man/diver with army engineers great lakes survey in UP on shores of lake Superior. (Taking note of your user name??)

180 degrees off course! Hee hee hee

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[TransitJohn]

12. Lol.

No, user name from a song by my favorite indie rock band, the Mother Hips. 180 deg off course....if I were that far off in my line of work, we'd be drilling up!

[oneighty]

13. 180

is a sorry nickname I carried for a short time in the Navy. I acquired it not from steering a compass course-no nothing so exciting.

It was because in the frequent volley ball games the ball when I did manage to connect with it almost always flew 180 degrees out from where I intended it to go. How embarrassing!

So you are in the drilling business. Interesting.

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