The Market Outlook for Natural Gas: The Wyoming Natural Gas Pipeline Authority’s Perspective Leadership Wyoming Class of 2005 Gillette, WY October 21, 2004

Preview WPA mission statement WPA mission statement Forecast for Natural Gas Forecast for Natural Gas Facts and observations Facts and observations Past and future production growth Past and future production growth Existing infrastructure and pricing history Existing infrastructure and pricing history Pipelines Pipelines

Wyoming Pipeline Authority Resolution May 2004 Resolution No. 1 By statue, ( (a)(iv)), the Wyoming Natural Gas Pipeline Authority is authorized to “plan, finance, construct, develop, acquire, maintain and operate within or without the state of Wyoming, pipelines, pumps, storage, and other attendant facilities and equipment necessary therefore and all other property, structures, equipment, facilities and works of public improvement necessary or useful for the accomplishment of the purposes for which the Authority was created.” And By statue, ( (a)(xiii)), the Wyoming Natural Gas Pipeline Authority is authorized to “Do any and all things necessary or proper for the development, regulation and accomplishment of the purpose of the authority within the limitations of authority granted by this act.” Hereby be it resolved that the Wyoming Natural Gas Pipeline Authority, shall involve itself or intervene as necessary in any and all matters it deems necessary related to the timely and reasonable development of natural gas in the state of Wyoming in order that the Authority accomplishes its goals and statutory responsibilities.

Natural Gas Production, Consumption, and Imports, (trillion cubic feet) Consumption Production Net Imports HistoryProjections Natural Gas Net Imports, 2002 and 2025 (trillion cubic feet)

Gas Facts and Observations  Wyoming and the Central Rockies have about a ten-year supply of natural gas for the U.S. (more than 171 Tcf).  Because of pipeline constraints, it would take about 150 years to bring this gas supply to market.  Wyoming and the Central Rockies have more than 20% of the remaining North American supply, but less than 7% of the U.S. market.  Based on the foregoing, Wyoming should export 12 Bcf/d, rather than the current rate of 4 Bcf/d.  Other gas supply provinces in North America are mature and are declining (Canada, Mid-Continent, Texas, & Louisiana).  Wyoming has the opportunity to gain market, ahead of the expansion of LNG terminals or development of Alaska pipelines.

Gas Facts and Observations (Continued)  There are many alliances and benefits to developing this gas resource: Pipelines will increase their business with new facilities.Pipelines will increase their business with new facilities. Producers can market the resources profitably.Producers can market the resources profitably. Consumers will be assured a secure and competitive supply.Consumers will be assured a secure and competitive supply. Wyoming has revenue to run the state.Wyoming has revenue to run the state. The U.S. benefits from a currently underutilized energy supply.The U.S. benefits from a currently underutilized energy supply.  The single-most important objective for Wyoming and the country’s foreseeable energy needs is to build more natural gas pipelines into Wyoming and the Central Rockies.  Wyoming legislation provides the tools to plan, finance, build, and operate natural gas pipelines.

Where is Production Growing... The Rockies!!!!!

Natural Gas Pipelines & Volume of Remaining Supply (Tcf) The pipeline system is underbuilt in relation to the natural gas resource in the Central Rocky Mountains. This gas supply is underutilized and undervalued as a consequence of lack of pipeline capacity.

Pipeline Export Projects El Paso Cheyenne Plains – under constructionCheyenne Plains – under construction Ruby ProjectRuby Project Kern River Gas Transmission Co. Kern River Pipeline ExpansionKern River Pipeline Expansion Williston Basin Interstate Pipeline Co. Grasslands Pipeline Expansion - completedGrasslands Pipeline Expansion - completed Northern Border Partners, L.P. Bison ProjectBison Project Kinder Morgan AdvantageAdvantage TransColorado (CO to NM)TransColorado (CO to NM)Enbridge Chicago ProjectChicago Project Southern Star Western Frontier ProjectWestern Frontier Project

Kern Expansion Northwest PL Expansion El Paso ‘Cheyenne Plains’ and Kinder ‘Advantage’ Northen Border ‘Bison’ Pipeline

Cheyenne Plains

Intraregional Projects El Paso Front Range Expansions Xcel Front Range Projects Kinder Morgan Huntsman Storage Project Huntsman Storage Project Greasewood to Cheyenne Greasewood to CheyenneTotem Gas Storage Project Gas Storage ProjectQuestar Greasewood to Kanda loop Greasewood to Kanda loop Wyoming Interstate/Overthrust Backhaul Projects Jonah/Opal/Powder/Wind River Gathering/Processing Expansions EnCana Entrega NW Colorado to Cheyenne Project Entrega NW Colorado to Cheyenne Project

Before WPA After WPA

Cost of Limited Infrastructure to Wyoming $130 + million in Federal/State royalties and severance taxes – $130 + million in Federal/State royalties and severance taxes – $1 million per day in March $1 million per day in March Stalled investment in development of mineral resources. Stalled investment in development of mineral resources. Limited ability to predict revenues with certainty. Limited ability to predict revenues with certainty.

Variables Influencing Success  Access to Lands in a Timely Manner  Price  Timing of Regulatory Approvals  Gathering System Capacities and Pressures  Transportation Export Capacity  Capital Efficiency  Public Acceptance

Biomass Solar Wind To produce 20Q/y (20% of US energy consumption)

The Wyoming Pipeline Authority Will Promote all industry sponsored and supported projects. Promote all industry sponsored and supported projects. Proactively promote infrastructure development within the state and the Rocky Mountain Region. Proactively promote infrastructure development within the state and the Rocky Mountain Region. Promote efficient utilization of existing infrastructure in a cost effective manner. Promote efficient utilization of existing infrastructure in a cost effective manner. Promote development of Wyoming’s mineral resource base in a systematic, streamlined and environmentally responsible manner. Promote development of Wyoming’s mineral resource base in a systematic, streamlined and environmentally responsible manner. Utilize its bonding authority to build or cause to be built infrastructure projects that will enhance state netbacks and promote development of a resource base that is in the nation’s best interests. Utilize its bonding authority to build or cause to be built infrastructure projects that will enhance state netbacks and promote development of a resource base that is in the nation’s best interests.

Thank You Thank You Marc Strahn Ph Fax This presentation can be accessed via our website at: