CASPER, Wyo. — Part of a $4 billion natural gas pipeline completed six years ago to export gas from the Rocky Mountain region to the Midwest is about to move gas in the opposite direction.
The reason: Surging gas production in eastern states has provided a new source of gas for Chicago and other Midwestern markets.
On Aug. 1, Rockies Express Pipeline operator Tallgrass Energy plans to open the valve on a massive expansion to accommodate gas extracted from the Marcellus Shale underlying Ohio, Pennsylvania and West Virginia. The gas will flow not west to east but east to west, toward Chicago.
The development will weigh on Wyoming’s gas industry over the next several years. Gas sales from the Rockies to the Midwest are projected to fall while sales from the Northeast to the Midwest are projected to rise, the Casper Star-Tribune reports.
“It is a dramatic change and not good for Wyoming producers, certainly,” said Mark Doelger, who advocated construction of Rockies Express during seven years as executive director of the Wyoming Pipeline Authority.
A decade ago, not enough pipeline capacity existed to export natural gas produced in Wyoming to markets where it could have been sold. The result was Wyoming gas consistently carried a much lower price than gas drilled elsewhere in the U.S.
Rockies Express sought to erase the difference — and succeeded. Gas from western Wyoming now carries about the same price as gas drilled elsewhere.
Construction of other pipelines should help Wyoming’s gas industry continue to compete. They include the Kern River and Ruby pipelines from western Wyoming to Las Vegas and northern California, respectively.
Now, about 40 percent of the gas produced in Wyoming is bound for the Midwest and 60 percent to markets farther west, said Brian Jefferies, current director of the Wyoming Pipeline Authority.
Two years ago, those percentages were reversed, he said.
“It is not a severe blow, by any means,” Doelger said of the Rockies Express change in flow. “We continue to access almost every market in the U.S.”
Information from: Casper (Wyo.) Star-Tribune, http://www.trib.com
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