energy
Despite Demand, Oil and Gas Value Drops
By Richard Martin, 3-28-08
 |
|
 | |
|
With the price of a barrel of oil zooming past $106 and likely to continue rising, you would think that the value of the oil and gas coming out of the Rocky Mountain West would be setting records. That’s not happening, mainly due to a lack of transport options to get the fiuel to big markets in the Midwest and East.
Colorado produced $6.63 billion worth of oil and natural gas in 2007, dropping 24 percent from ‘06, according to the Colorado Geological Survey. “A dearth of pipelines prevented companies from transporting more gas from Colorado to markets in the Midwest and on the East Coast, which kept the local supply high,” reports The Denver Post, pushing prices down. The value of Colorado’s oil and gas is down nearly 30% since 2005, raising questions about Gov. Bill Ritter’s drive to raise severance taxes on the gas and oil industry.
“A lawmaker close to the decision-making process said that Ritter and the legislature’s Democratic leadership already have decided to back a [ballot] measure raising the tax paid by the gas and oil industry,” The Rocky Mountain News reported this week.
Meanwhile, the opening of new pipelines from the producing fields of the Mountain West should relieve the pressure on prices. The The $4.4 billion Rockies Express pipeline opened last month, and two pipeline companies this week announced plans to construct an 800-mile natural-gas conduit from Wyoming to Canada and to the Eastern U.S. The “Rockies Alliance Pipeline” would cost $3.5 billion to build.
In other energy news:
-- Colorado legislators trying to extend the requirement to invest in energy efficiency technology from large investor-owned utilities to municipal utilities and rural electric associations suffered a setback this week. HB1107, which would require most power providers to spend 2 percent of annual revenues on measures to reduce power wastage, is stuck in a Senate committee and may be diluted or killed altogether.
-- Saying “Colorado has demonstrated immense leadership in the development of renewable resources and alternative energy,” wind-energy producer Renewable Energy Systems Americas is relocating its headquarters from Austin to Broomfield, bringing 70 full-time jobs and plans to hire 70 more people in the next year. RES-Americas “has projects in six states and Canada, including the Cedar Point Wind Project” in Colorado, the Post reported. The Cedar Point wind farm is expected to be completed in 2010.
-- Despite huge coal reserves in the Rocky Mountain West and elsewhere in the U.S., the black fuel is in short supply around the world and prices are rising. “An untimely confluence of bad weather, flawed energy policies, low stockpiles and voracious growth in Asia’s appetite has driven international spot prices of coal up by 50 percent or more in the past five months,” report Steven Mufson and Blaine Harden of The Washington Post, “surpassing the escalation in oil prices.” The rise in the price of coal casts further doubt on ambitious coal-to-liquid conversion and carbon-sequestration schemes which have mostly stalled in the last year.
Like this story? Get more! Sign up for our free newsletters.
Comments
Be the first to comment on this article. Please complete the form below.