File name: JACBudgetHearings2014_20140113_080237.dcr Folder: C:\Documents and Settings\happropriations\My Documents\JAC Audio 2014 0 ~ 1/13/2014 8:55:33 AM ~ January 13, 2014 JAC Agency Hearings - Chairman Bebout 0 ~ 1/13/2014 8:55:33 AM ~ Start Recording 1 ~ 1/13/2014 8:55:35 AM ~ Wyoming Pipeline Authority 1:46 ~ 1/13/2014 8:57:20 AM ~ Bebout: Roll Call - 2:21 ~ 1/13/2014 8:57:55 AM ~ Richards: Roll Call - Hastert and Perkins excused 2:35 ~ 1/13/2014 8:58:09 AM ~ Bebout: Welcome - 2:44 ~ 1/13/2014 8:58:17 AM ~ Harshman: ... 3:04 ~ 1/13/2014 8:58:37 AM ~ Bebout: Welcome to Brian.. instructions 4:30 ~ 1/13/2014 9:00:04 AM ~ Jeffries: natural gas pipeline capacity is good. Competing with other states for pass through in pipeline. Crude oil prices may be 20 dollars different which reflects constraints on oil pipleline capacity...have other options to move oil. Pipeline contracting makes it more difficult to get lines built..10 or 15 year contract, have to pay for space whether used or not, difficult to reliabily forecast. 8:36 ~ 1/13/2014 9:04:09 AM ~ Jeffries: Right of Way corridors on public land, BLM. AML funds assigned to use to try to rectify mismatched corridors. WPA will use those funds to make application to coordinate those corridors. make wyoming more attractive for investments. cut down time to build on public lands. 10:26 ~ 1/13/2014 9:05:59 AM ~ Dockstader: Confidence level low? Access to public lands on downward 10:49 ~ 1/13/2014 9:06:22 AM ~ Jeffries: Personal- things get more difficult over time, so time to get things done expands. 11:09 ~ 1/13/2014 9:06:43 AM ~ Stubson: Transloading facilities - ..? 11:41 ~ 1/13/2014 9:07:15 AM ~ Jeffries: We support all of them and track them, keep a list of their locations, in favor of any mechanism that gets product out of Wyoming in a timely fashion. 12:18 ~ 1/13/2014 9:07:52 AM ~ Stubson: Accident in ND? 12:49 ~ 1/13/2014 9:08:22 AM ~ Jeffries: Pipelines generally are safer in terms of accidents. ND pipeline accident will be reviewed. Purpose is to find what can be fixed, best practices. 13:33 ~ 1/13/2014 9:09:07 AM ~ Meier: insurance, building requirements? 14:07 ~ 1/13/2014 9:09:41 AM ~ Jeffries: outside my area of expertise, specific insurance requirements...feds regulate safety..can't answer that question. WPA is not a regulatory agency. 14:51 ~ 1/13/2014 9:10:25 AM ~ Meier: Will you find out who we can talk to so we can make determination of levels..if sufficient? 16:09 ~ 1/13/2014 9:11:42 AM ~ Bebout: pricing that had a negative mipact .you intervened. Willl that need to be done again? 16:36 ~ 1/13/2014 9:12:09 AM ~ Jeffries: one of the 13 pipeline companies, Trailblazer. Specifications of quality of gas ..Company made a request to fed agency to change carbon dioxide amount.. Want to limit it because it is inert gas which has no energy value and when combined with water can corrode the pipe. Trailblazer came up with a very narrow limit on CO2 - 10% of capacity was theirs. WPA intervened, argued faxts, engineering records. Powder River basin methane gas would have required expensive treatment, so inc. costs and lower production or move out on more expensive methods. FERC - WPA can offer the perspective of the detrimental impact. We succeeded. Fight for new pipelines and fight to keep what you have 21:04 ~ 1/13/2014 9:16:37 AM ~ Bebout: How did you determine this was to fight for and how were you aware of it? 21:30 ~ 1/13/2014 9:17:04 AM ~ Jeffries: National registry and applications. 21:40 ~ 1/13/2014 9:17:14 AM ~ Bebout: procedure in place to monitor? 21:48 ~ 1/13/2014 9:17:22 AM ~ jeffries: yes 21:52 ~ 1/13/2014 9:17:25 AM ~ Bebout: Cost and spending? 21:57 ~ 1/13/2014 9:17:31 AM ~ Jefffries: 2 M, funds will revert if not spent..have spent 70,000. large expenditures will go with environmental applications. 22:30 ~ 1/13/2014 9:18:03 AM ~ Bebout: BLM ...RMP ..adjust if not in RMP? Each RMP will be looked at individually? 23:01 ~ 1/13/2014 9:18:35 AM ~ jeffries: We will make an application for a pipeline, for a CO2 pipeline network, will touch almost every BLM office. Each filed office will have provisions, will argue independently in each RMP. Application for corridor will be consistent with each RMP that comes up. Right of Way application is administrative tool to cause BLM to react. 24:10 ~ 1/13/2014 9:19:43 AM ~ Bebout: EOR can provide background info. Big Horn Basin. Tom Fitzsimmons. Agencies need to work together. ..? 25:16 ~ 1/13/2014 9:20:50 AM ~ Jeffries: Big Horn Basin RMP kicked off looking at all the others. 25:41 ~ 1/13/2014 9:21:14 AM ~ Bebout: take away capacity, what is shipped? 25:49 ~ 1/13/2014 9:21:23 AM ~ Jeffries: natural gas = 10.4 M cubic feet. less than 77%. well piped . 3 states compete. 26:43 ~ 1/13/2014 9:22:17 AM ~ bebout: 30% more capacity than production 26:53 ~ 1/13/2014 9:22:26 AM ~ Jeffreis: yes, expectation was to use all capacity. 27:03 ~ 1/13/2014 9:22:37 AM ~ Bebout: Issue not take away but volumes, In future inability to drill on land 27:30 ~ 1/13/2014 9:23:03 AM ~ Jeffries: 10% reduction of price or volume has some effect on state revenue. Committments to large pipeline companies.. 28:05 ~ 1/13/2014 9:23:38 AM ~ Bebout: Statutes for WPA, budget of WPA. reviewing public documents. Has done an outstanding job to increase take awayu. Committee, think about WPA having authority to work on volume and access issues. WPA move in direction to help faciiltate us having access to mineral development. 29:20 ~ 1/13/2014 9:24:54 AM ~ Moniz: Ground storage? 29:39 ~ 1/13/2014 9:25:12 AM ~ Jeffries: no - gas not stranded because can't get it out of state. BCF capacity of 10, using 7. 30:16 ~ 1/13/2014 9:25:50 AM ~ Harshman: Next big project? Canadian pipeline stalled, made statement to run it through wyoming. 30:43 ~ 1/13/2014 9:26:16 AM ~ Jeffries: It won't be on the natural gas side. I see it as incremental additions to crude oil pipeline network. Gas pipeline being converted back to crude. wil add 200,000 barrels perday. Runs from Guernsey to OK. Rail loading stations. Not on sale of Ruby and Rocky Express (natural gas). 32:02 ~ 1/13/2014 9:27:35 AM ~ bebout: Differential on crude..pressure from the balkan, oversupplied market. Balkan crude is going up, 800,000 per day now, going up to 1 million. horizontal wells have some success in southern wyoming. Provide the differentials to this committee. If there is anything you think we can do..rails in Guernsey, Gillette, Casper, Cheyenne, to faciliatate that because 16 dollar differential will inc. 33:35 ~ 1/13/2014 9:29:09 AM ~ Jeffries: crude oil tight - Mfc refineries going down impacts capacity.. 34:08 ~ 1/13/2014 9:29:41 AM ~ Harshman: 30% undercapacity. Is that throughout the whole system or specific area? 34:26 ~ 1/13/2014 9:30:00 AM ~ Jeffries: 1/3 to the west and 2/3 to the east, reflects the overall balance. 6 BCF to the East and 4 to the west. 35:02 ~ 1/13/2014 9:30:35 AM ~ Bebout: CREG report.. 35:11 ~ 1/13/2014 9:30:44 AM ~ richards 35:14 ~ 1/13/2014 9:30:47 AM ~ Bebout: cold weather, 50 or 60 mpf for gas because of the cold. Look at long term and futures is not very robutst. Costs 4 mpf to produce while back east the cost is 2 to produce so there is a differential there. Same thing for oil, mkts still not robutst. 36:14 ~ 1/13/2014 9:31:48 AM ~ Bebout: Go through budget page by page. 36:23 ~ 1/13/2014 9:31:56 AM ~ Jeffries: Table C summary page. 36:39 ~ 1/13/2014 9:32:12 AM ~ Bebout: start with page 3 and go through. budget summary table. 37:22 ~ 1/13/2014 9:32:56 AM ~ Jeffries Travel and legal expenses, minimize and control those. 39:11 ~ 1/13/2014 9:34:44 AM ~ Bebout: Std budget, no expansion, gov approval 39:23 ~ 1/13/2014 9:34:57 AM ~ Stubson: Handout from WPA- payments for contractural less than budgeted. On salary, for 13-14 was total expended. 40:03 ~ 1/13/2014 9:35:36 AM ~ Jeffries: not the full amount, delayed adding staff during that period, IT position, 40:31 ~ 1/13/2014 9:36:05 AM ~ Bebout: Like the outreach throughout the state. Ex: speaking to rotary. that is in your budget. 41:06 ~ 1/13/2014 9:36:39 AM ~ Stubson: page 11 of the budget, unit request, line item 208 , doubled. 41:35 ~ 1/13/2014 9:37:09 AM ~ Jeffries: From time to time there is abackdrop for presentations, sits behind booth, periodically replaced. Do not have advertising per say. 42:13 ~ 1/13/2014 9:37:47 AM ~ Bebout: Think about some of what was asked...Minerals committee or JAC to follow up on volumes to prepare for the future. 42:44 ~ 1/13/2014 9:38:18 AM ~ Wyoming Infrastructure Authority- Lloyed Drain Executive Director 43:33 ~ 1/13/2014 9:39:06 AM ~ Drain: Introduced Bryce Freeman, Board member. 43:48 ~ 1/13/2014 9:39:21 AM ~ Bebout: instructions, Rocky mtn power, Zephr line..overview 44:08 ~ 1/13/2014 9:39:42 AM ~ Drain: Legislature - attempt to diversify state economy , clean coal, advanced fuel technology, production of energy and electrons, see progres. 6 projects= Gateway West, will be constructed. Reason for power line is to serve 5 state region. Took 6 years to get the record decision,. We have same issues with BLM field offices. Transwest express project, line from Carbon county to connect south of las vegas. 3000 megawatt, 700 miles line. Wind farm from Carbon county. will be 5th largest in the world.. Gateway South is pacific corp 1500 megawatt, line into Utah, draft EIS next month, which is sign of progress Zephry line: just announced they will not pursue the process anytime soon. If you do not have an EPA statement, can't devlop. Being done by Duke, no pursuing 49:26 ~ 1/13/2014 9:45:00 AM ~ Stubson: ? 49:32 ~ 1/13/2014 9:45:06 AM ~ Drain: Misso - largest in company, at least 10 years away 50:33 ~ 1/13/2014 9:46:07 AM ~ Harshman: Gateway west Carbon? 50:42 ~ 1/13/2014 9:46:15 AM ~ Drains: no - 50:52 ~ 1/13/2014 9:46:25 AM ~ Harshman: sierra madre wind project? 50:59 ~ 1/13/2014 9:46:33 AM ~ Drains: wind power from sierra madre, CA is not buying coal fired generation, even turning nose up at gas fired generation,. have tremendous market for renewable resources, Electron flow in future is unknown, infrastructure will bein place. 52:01 ~ 1/13/2014 9:47:34 AM ~ Harshman: Transmission of clean coal, Any talk of hybrid or nuclear? 52:25 ~ 1/13/2014 9:47:58 AM ~ Drain: Legislatue had committee addressing nuclear power. Very little discusion relative to nuclear. 52:53 ~ 1/13/2014 9:48:26 AM ~ perkins: Midwest express, other projects, for export..? 53:27 ~ 1/13/2014 9:49:01 AM ~ Drain: projects proposed about going east. Other than midwest express. Gateway West and south, transwest express, high plains express, wyo colorado intertype project, zephry. All those lines will not get built. I think we will build 1/3. Gateways will get built, public service commissions will approve pass through of costs. We have commissioned two job creation and econimic benefit studies. We will benefit, question of when and how much is builit. 55:17 ~ 1/13/2014 9:50:50 AM ~ Perkins: smart grid, dated grid. new or advancement? 55:47 ~ 1/13/2014 9:51:20 AM ~ Drain: see improvements with efficiency with demand and response applications with energy imbalance mats. Ex: pacific corp agreement to blance mkts. have purchased MV energy, will expand their footprint in the west, improve reliability, Yes, improvments every day. 56:46 ~ 1/13/2014 9:52:20 AM ~ Perkins: Wind...not as agressive as 3 or 4 years ago..stagnant after Chokecherry ,sierra madre? 57:32 ~ 1/13/2014 9:53:05 AM ~ Drain: marked drop in wind development. Pathfinder payin leases in platte county, wasach in pioneer park, small wind farm. Wyoming Wind and power, owned by Scott Bloom, announced withdrawal from Wyo-Co ...had 90% of capcity, did not have the market. Some people came into the state expecting to purchase and flip. Has not happened. This is very competitive and only well funded companies will survive. 59:15 ~ 1/13/2014 9:54:48 AM ~ moniz; Southern state line project proposed ? 59:30 ~ 1/13/2014 9:55:04 AM ~ Drain: Wyo Co enegy impact project. jsut referred to it. Will take luck and acknowledgement by colorado that more than just price per megawatt hour needs to be considered. Studies show econimic benefits because our wind has different patterns than Colorado, combining it smooths out differences and saves money. 1:00:58 ~ 1/13/2014 9:56:32 AM ~ Bebout: 1:01:01 ~ 1/13/2014 9:56:35 AM ~ Drain: Two studies commissioned to quantify the job creation and exonomic benefit.. Sweetwater Texas mayor came up and talked to stakeholders about benefits wiht only 2500 megawatts wind capacity, schools, roads, medical faciities, inc. tax base. It will be beneficial to state when projects are built. BLm field offices, problems with transmission line permitting. Gov West Association - addressing issues of permitting with panel transmission, confident of improvements. DOE and BLM discussions about infrastructure, act in uniform manner. market outreach program in CA. 1:05:48 ~ 1/13/2014 10:01:22 AM ~ Drain: Mandate on clean coal and advanced fuel technology.. clean coal and sequestration, working with UW and others. Initiative to appraise stakeholders of what is happening. 3 carbon sequestration , 2 are under construction. NRG faciilty in houston are retrofitting coal generatino to capture CO2, saskatchawan faciity, missouri facility capturing CO2. We are following that. Committee invited to Board meeting on the 23, 24. 1:08:26 ~ 1/13/2014 10:03:59 AM ~ Dockstader: how do we market to claifornia? 1:08:37 ~ 1/13/2014 10:04:10 AM ~ Drain: WICK study in 2011 showed californai can benefit to tune of 600 M per year by allowing out of state transmission to deliver renewable, geographical study, combining wyoming wind with california wind and solar smooths out variabliity. Board meeting will present new grid integration study. will use that in our outreach efforts 1:09:54 ~ 1/13/2014 10:05:27 AM ~ Stubson: current state in CA on allowing out of state producers. 1:10:07 ~ 1/13/2014 10:05:40 AM ~ Drain: When we meetwith them, I point out that they already import wind and solar. Renewables are Jerry Browns...have left door open. So compeling what we have to offer. Studies...info, mkt place. CA shut down songs nuclear faciity, have a drought so hydroelectric power is down. We are confident that at least one line will get built. 1:11:35 ~ 1/13/2014 10:07:08 AM ~ Stubson: does it requiree a legilative change in CA to allow? 1:11:46 ~ 1/13/2014 10:07:20 AM ~ Drain: Projects qualify as in state equivelents. DC lines are first point of interconnection into line south of vegas. 1:12:29 ~ 1/13/2014 10:08:03 AM ~ Bebout: What capacity do we lack, with transmission lines? Coal fired power plants, Regional Hays rule has negative impact on WyoDac, Dave Johnson, Jim Bridger and Wheatland plant. Billin dollar expenditure that does nothing. If power plants shut down some of their units, what is impact? Want big picture. 1:14:05 ~ 1/13/2014 10:09:39 AM ~ Drain: Follow up report after meeting? 1:14:16 ~ 1/13/2014 10:09:49 AM ~ Bebout: yes. Tangible result from your hard work...justification of money spent. 1:14:49 ~ 1/13/2014 10:10:23 AM ~ meier: Pacific Corp meeting 12 years ago..time period not relative to 3 or 4 years, 1:16:27 ~ 1/13/2014 10:12:00 AM ~ Drain: Happy to file the report, work and results. 1:16:51 ~ 1/13/2014 10:12:24 AM ~ Bebout: budget by page 1:16:56 ~ 1/13/2014 10:12:30 AM ~ Drain: page 3 is summary. 1.62 M for biennium. series of expenditures. supporting , data services, contractural or profesional services are the bulk of the budget. . Skip narrative, Page 7 budget exception is for server and software, aligns with ETs replacement policy. Gov approved 1:18:45 ~ 1/13/2014 10:14:18 AM ~ Bebout: relationship? 1:18:51 ~ 1/13/2014 10:14:25 AM ~ Drain: very good, responsive A+ 1:19:06 ~ 1/13/2014 10:14:39 AM ~ Stubson: 400 series decreased amount of exception request inc in 200 series. 1:19:23 ~ 1/13/2014 10:14:56 AM ~ Drain: only as applies to ETS, 1:19:36 ~ 1/13/2014 10:15:10 AM ~ Drain: page 8 - brief org chart, 5 member board of directors, Mike Eisley chairman, Kyle White vice chairman, Bryce Freeman,, treasurer, J. Shaeffer, has experience in industry, Dave Sparks is newest member, in transportation business. 1:21:32 ~ 1/13/2014 10:17:06 AM ~ Bebout: ? 1:21:38 ~ 1/13/2014 10:17:12 AM ~ Drain: Tristate ... 1:22:24 ~ 1/13/2014 10:17:57 AM ~ Bebout: ..callbacks 14-16 million for the plant. prototype of equipment to capture CO2. State provided 14-18 M to build demonstration plant..Don, Brett, see where the Governor is. 1:24:47 ~ 1/13/2014 10:20:20 AM ~ Jones: Will followup with the gov officer, 1:25:12 ~ 1/13/2014 10:20:45 AM ~ Wallis: pursue this idea. 1:25:20 ~ 1/13/2014 10:20:54 AM ~ Bebout: come back with Mike 1:25:30 ~ 1/13/2014 10:21:04 AM ~ Drain: will do that. 1:25:40 ~ 1/13/2014 10:21:14 AM ~ Drain: page 8 Board of directors, 2 employees, myself and Martinez. page 16 - detail on series 200. Exc request of 3606. gov approved. Total busget is 1.26 M. next page has adjustment to series 400 reduction of 4000 for biennium. We appreciate the funding we receive and use it wisely. 1:27:32 ~ 1/13/2014 10:23:06 AM ~ Bebout: Thank you..Don - communite with Drain to set up meeting. Return at 1045. 1:29:14 ~ 1/13/2014 10:24:47 AM ~ Pause 1:29:14 ~ 1/13/2014 10:50:22 AM ~ Resume 1:29:14 ~ 1/13/2014 10:50:22 AM ~ 070 - EOR - Enhanced Oil Recovery Commission David Mohrbacher, Director Bruce Williams, Enhanced Oil Recover Commission Chairman Tom Fitzsimmons, Enhanced Oil Recovery Commission, Vice-Chairman Pepper McClenahan, Business Manager Mohrbacher: presented history of primary and secondary oil wells. 90% of oil production in state comes from True oilfields, which are wells older than 25 years old. Recover 10% in oil reservoir, 20% in secondary wells. 1:29:32 ~ 1/13/2014 10:50:40 AM ~ Mohrbacher: Salt Creek, early. Higher oil prices enable better technology. History of production since 1980, which declined, but returning with unconventional recovery methods. Accumulative production 1:34:51 ~ 1/13/2014 10:55:59 AM ~ Harshman: Jobs involved with older wells and related oil recovery. 1:35:22 ~ 1/13/2014 10:56:30 AM ~ Mohrbacher: CO2 production with regard to oil well recovery. 1B barrels of oil connected to wells production to state, 40 years, 40M barrels a year, currently 60M barrels annually Half of carbon dioxide injected is returned to surface. Peak consumption first 2 years. 10,000 of jobs with oil recovery jobs as related to older well recovery. 1:39:24 ~ 1/13/2014 11:00:32 AM ~ Wallis: Beaver Creek? 1:39:37 ~ 1/13/2014 11:00:45 AM ~ Mohrbacher: Close to Riverton. 1:39:58 ~ 1/13/2014 11:01:06 AM ~ Wallis: Location of mature fields being enhanced relative to where carbon dioxide is located? 1:40:28 ~ 1/13/2014 11:01:36 AM ~ Mohrbacher: Yes. Statewide. Permitted right-of-ways defined, consider locations of carbon dioxide, related to public lands. More fields could be implemented if CO2 found. Program details, including applied research, helping operators use technology. Utilize grad students and faculty. Bar chart which illustrates staffing, 19 full time, part time staff also. Reallocated staff which originally were used for faculty, not as extensive. Project examples listed, including Timber Creek, Grieve Field. 21M barrels of oil recovered in 2 fields. Workshop participants. Use of methane and nitrogent as recovery technique. Typically 10% recovery, trying for more from unconventional reservoirs of oil. 1:55:41 ~ 1/13/2014 11:16:49 AM ~ Stubson: Investment opportunities 1:56:24 ~ 1/13/2014 11:17:32 AM ~ Mohrbacher: Utilization of personnel within a company; competition for resources to work a mature oil field. Another issue is sensitivity to oil pricing. 1:58:45 ~ 1/13/2014 11:19:53 AM ~ Dockstader: Permitting process taking 2-3 years, improving at all? 1:59:01 ~ 1/13/2014 11:20:09 AM ~ Mohrbacher: No 1:59:06 ~ 1/13/2014 11:20:14 AM ~ Bebout: Salaries and attracting and keeping quailified people...how done? 2:00:40 ~ 1/13/2014 11:21:48 AM ~ Mohrbacher: Retaining talented staff, so try to recognize staff and give great working environment, ie modern updated lab. Chain of command. 2:07:07 ~ 1/13/2014 11:28:15 AM ~ Mohrbacher: Great help from Laurie Anderson and Don Richards. Commission and support. all expenses paid out of outreach budget, increase of $5.2M. Support of commission, which includes work done by agency administrative staff. 2:08:48 ~ 1/13/2014 11:29:56 AM ~ Williams: Commission works well with Mohrbacher, and Mohrbacher works well with University of Wyoming. 2:10:34 ~ 1/13/2014 11:31:42 AM ~ Mohrbacher: Employees of UW, $111,000 equates to 4% UW pay increase request. Not approved by governor. Commission meets 4 times a year. Work with operators, technical advisory board, 12 members. 2:15:35 ~ 1/13/2014 11:36:43 AM ~ 2:15:45 ~ 1/13/2014 11:36:53 AM ~ Pause 2:15:45 ~ 1/13/2014 11:57:39 AM ~ Stop Recording