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The Coalbed Natural Gas Alliance
strives to provide you with the latest information and commentary on
CBNG.
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COALBED NATURAL GAS Thanks predominately to coalbed natural gas development, Wyomingites have a surplus of over a billion dollars.Many surface and royalty owners see the development as an economic dream. CBNG is vital to meeting the nation’s energy needs of a growing world community. It is predominately responsible for providing the state with a remarkable surplus of $1.2 billion in 2004 alone that would otherwise not be possible. CBNG is a valuable safe resource that is clean, abundant, and affordable, according to the Center for Liquefied Natural Gas. The Petroleum Association of America says more than 60 million Americans use natural gas to fuel stoves, furnaces, water heaters, clothes dryers and other household appliances. More than 10% of that natural gas supply now comes from coalbed natural gas. They also say that development of coalbed natural gas has a high success rate with 93.9 percent of drilled wells producing gas. Wyoming ranks fourth in the nation in CBNG production. Don Likwartz, Oil and Gas Conservation Commission director, said, “Natural gas, including CBNG has been the main reason that Wyoming has had a budget surplus the past four years.” The Powder River Basin reserves alone would provide $8.3 billion to the state in severance taxes and $4.8 billion in ad valorem taxes to the three counties involved. He suggested using a conservative CBNG price of $3 for every thousand cubic feet for the 30-40 year life of the development to arrive at those figures. There would also be substantial sales and use taxes on top of these, said Likwartz. While most of CBNG development has occurred in the Powder River Basin, coalbed operators are looking at other parts of Wyoming for additional reserves. Likwartz said the coals in southern Wyoming are estimated to contain four to five times the gas reserves as the Powder River Basin. Also, once the development is fully under way in southern Wyoming, additional severance and ad valorem taxes will be generated beyond the number listed above. Revenues from severance taxes are distributed to the Mineral Trust Fund, schools, cities, towns, highways, counties, and water development. The revenues in CBNG reserves would account for $16,559 per Wyoming resident in severance taxes alone. Considering the taxes generated solely from oil and gas, last year each Wyoming citizen received an indirect payment of $1,500 as a result of production. This is like saying each person in Wyoming paid $1,500 out of their pockets to improve schools, highways, water development, and their cities. But the money did not come out of their pockets. It came from Wyoming’s oil and gas resources. Responsible CBNG development will continue to provide for Wyoming. The Powder River Basin is estimated to contain 25 trillion cubic feet of CBNG reserves, said Karen Brown, coordinator of the Coalbed Natural Gas Alliance. She said this number compares to the 1.5 trillion cubic feet that has been produced. That means that approximately 6 percent of these gas reserves have been produced in the Powder River Basin. “With continued responsible development, the revenues generated from coalbed natural gas will yield more revenue and jobs for Wyoming. The nation will benefit with the production of this clean energy source as well,” Brown said. The CBNGA’s mission is to inform and communicate accurate information as well as provide education about coalbed natural gas development primarily within the Powder River Basin. The CBNGA is composed of energy providers, businesses, ranchers, farmers and citizens throughout Montana and Wyoming that support responsible energy development.
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