OrediggerPoke said:
GoPokes86 said:
OrediggerPoke said:
ragtimejoe1 said:
Nobody better laugh unless your primary school is P5.
Agreed, not just the University of Wyoming but the whole state is at a critical juncture. Funding is going to be a growing major major concern.
Coal is being displaced by gas for electric generation faster than anyone could have reasonably predicted (in 2007 coal accounted for 49% of the grid, in 2014 coal accounted for 39% of the grid, in 2015 coal accounted for 33%, in 2016 there is a belief it may fall into the 20s). The increased gas production is unlikely to come from Wyoming in any meaningful way to offest the loss of coal production (these Eastern wells really are that good). I'm not crying wolf, we have some serious funding concerns going forward even when commodity prices recover.
Unfortunately, this is completely true. The worst thing that happened for western natural gas was the Marcellus shale discovery. When wells IP at over 25mmcf/day they can easily respond to peak needs in the highest population area and highest demand area in the country with even a modest drilling program. I highly doubt we will ever see gas over $4/mcf in the next 10 years which is the point that the State is able to stack money in the coffers. Unless oil reaches $70+/bbl and is sustained and we find a Bakken/Wolfcamp like basin in Wyoming funding is going to be tough.
I'm with you; I just don't see oil production saving the State's coffers either. Even at $70/bbl, the Bakken is not all that profitable and the Middle East has little reason to let our unconventional producers capture additional market share. Also, keep in mind that in Wyoming's 'new frontier' of oil development in Laramie County, the minerals are almost entirely owned by private individuals and companies. The largest portion of Wyoming's revenue on oil and gas comes from state owned and federally owned minerals (Wyoming gets half of the 1/8 federal royalty).
We certainly can't just bury our head in the sand and say 'it will come back just like it always does.'
One analysis I read indicated that the gulf states only have a little bit of time at depressed oil prices before they can no longer service their debts, and have to start cutting back on social programs and handouts. Off the top of my head, they were something like:
- Qatar - 1 year
- UAE - 18 months
- Saudi - 2 1/2 to 3 years
Russia, Indonesia and others are already cutting.
So oil could come back pretty well, once the gulfs either decide they have to stop the race to the bottom to protect pointless market share (they can't put US oil out of business even at $25 a barrel), get overthrown, or get out of the business (see the Saudi sovereign wealth fund).
What isn't coming back is coal. Regulation is going to keep it down.