Volume 7, Number 36 - November 29, 2007
brought to you online by Pinedale Online
Gas To Go Underground For Its Trip East
The Rockies Express Pipeline (REX), a 1,679-mile natural gas pipeline system, will carry natural gas from Rio Blanco County, Colo., to Monroe County, Ohio. This system will allow gas to be shared from the western areas where it is plentiful to the easterly portion of the US where the need is greatest and least met.
The system will be comprised of three sections: REX-East, Rex-West and REX-Entrega with compressor stations along the way as there is need. According to REX, LLC the proposed location of the system was determined in part by Federal Energy Regulatory Commission (FERC) guidelines (which encourage locating new systems along side previous ones) and environmental impacts. Landowners will also be addressed.
REX-Entrega consists of two segments. Segment one is a 36-inch diameter pipeline that runs from the Meeker Hub in Rio Blanco County, Colorado to the Wamsutter Hub in Sweetwater County, Wyo. (136 miles). Section two is 192 miles of 42-inch diameter pipe running from Wamsutter to the Cheyenne Hub in Weld County, Colo. Construction on this segment began in July 2006 and was placed in service February 2007. New compressor stations are currently in the works for the Meeker and Wamsutter Hubs.
From Weld County to Audrain County, Mo., runs the 713 miles of REX-West. The majority of this pipeline runs through sparsely populated areas and is parallel to existing pipeline. REX-West has a projected in-service date of December 2007. The new compressor facilities will be located near Echo Springs, Wyo., near the Cheyenne Hub in Colorado, near Julesburg, Colo., near Steele City, Neb., and near Turney, Mo.
The eastern-most 638 miles of the pipeline, considered REX-East will run from Audrain County, Mo., to Monroe County, Ohio. Helping to meet the nations growing need for energy, REX-East will provide energy to markets in Illinois, Indiana and Ohio. Plans for construction on REX-East are set to begin in the late summer of 2008 with a projected on-line time of June 2009. The five preliminarily planned compressor stations along the route are near Mexico, Mo, near Blue Mound, Ill., near Bainbridge, Ind., near Hamilton, Ohio and near Chandlersville, Ohio. These pressure stations serve as a location where the natural gas will be re-pressurized to continue their progress through the system.
Why it was needed
The $4.5 billion project will serve as a safer way to get the natural gas across the country to those who do not have an abundant supply. “That’s the safest way to transport natural gas – underground,” said REX spokesman Alan Fore. “We’re basically the construction highway that gets the gas there, we don’t actually own (the gas).”
With the increased energy needs soaring throughout the country, natural gas has taken its stand as reputable, clean-burning and low carbon emission choice.
“Natural gas plays an enhanced role in energy needs,” Fore said. “And it is an important infrastructure (being) developed to transport gas from where it is plentiful to the midwest and east where it is needed.”
According to Fore, all the gas (all 2 billion cubic feet a day in addition to what is already being produced) is fully subscribed, meaning it has already been sold and has a place to go before it begins its journey through the pipeline. “We know where it’s going to go,” Fore said. “And the best part, it’s made in America, so to speak.”
Fore said the company sees no imminent end to the pipeline’s use and hopes to keep it running indefinitely.
“As there is need, it will continue to supply,” he said. “We want to increase our energy reserves for our country and our future–this will help.”
The company hopes to have REX-West up and running by the endof this year, and while there is currently no plans for a larger or duplicate pipeline in the near future, Fore said the company hopes to remain “resourceful and innovative to utilize the riches we have and somehow make them viable.”
What we can expect
The biggest change the pipeline should bring about will be an increase in tax revenue for local governments. Most earnings made by government bodies come from the ability to tax the natural gas as it leaves. An increase in product leaving means an increase in taxable product.
“The increased pipeline capacity should also result in greater tax revenues for western producing states, which have recently seen depressed regional pricing due to insufficient transportation to move gas out of the area,” Communications Specialist for Questar Emily Fisher said. “The communities to the east of the Rockies should see a slight decrease in their natural gas prices due to the greater supply of gas coming into that region from the west.”
Midwestern communities are currently paying highly inflated prices for their natural gas supply. While it is still speculation, it is thought that the increased availability of the gas will help lower some of these prices. In addition to the tax revenue in the west and more readily available supply of natural gas in the Midwest, REX, LLC hopes the addition of permanent workforce and temporary construction crews will help boost the economies surrounding the area of the new Pipeline. REX, LLC lists some of its benefits to the community as “new job opportunities in both the short term (during construction) and the long-term (during operation of the pipeline and compressor stations)” and “increased revenues to local restaurants, hotels/motels and retailers from patronage of construction crews.”
The largest change, however, made by REX will be the increase in available natural gas outside the western producing areas. “REX is expected to expand the gas supply for Midwestern consumers and increase the tax and royalty revenues for western producing states,” Fisher said. “Additionally, this will help meet the nation’s growing energy demand.”
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