An energy company executive Wednesday told Utah lawmakers Wednesday that because new pipelines will ship natural gas from the Rocky Mountain region to the West Coast and Midwest, Utahns accustomed to the lowest natural gas prices in the lower 48 states will end up paying more to heat their homes.
"It's necessary to have those pipes," said Duane Zavadil, vice president for government and regulatory affairs for Bill Barrett Corp. of Denver. "The downside is Utah consumers will pay more."
Zavadil made his remarks during a briefing about Nine Mile Canyon and drilling eastern Utah's West Tavaputs Plateau before the Natural Resources, Agriculture and Environment Interim Committee.
Bill Barrett Corp. expects to take 1 trillion cubic feet of gas from about 800 wells during the next three decades. The company says that's equal to 60 percent of Utah's needs for 10 years.
The company has been running print, television and radio ads that say the West Tavaputs drilling will keep natural gas prices low in Utah. But that gas won't necessarily stay here.
Bill Barrett Corp. already is embroiled in controversy over the damage dust-suppression chemicals may have on ancient rock art near the canyon road. Nine Mile Canyon holds more than 10,000 known American Indian rock-art images.
The West Tavaputs project now consists of about 100 wells and already requires hundreds of big-rig trips every week up and down the canyon's dirt road. Bill Barrett has used corrosive magnesium chloride to tamp down dust, but the spray also has landed on the rock art. The company now is testing chemicals that may be less harmful.
Three conservation organizations last month sued the U.S. Bureau of Land Management, claiming the agency is paying too little attention to the company's effect on the art and air and water quality.
But legislators on the committee brushed aside any rock-art worries to express concern about energy independence and potential heating-cost increases due to increased exports from Utah.
"I just don't think dust is important when we're talking about foreign nations strangling us," said Sen. Margaret Dayton, R-Orem.
Sen. Mike Waddoups, R-Taylorsville, asked Zavadil about new pipelines that would ship Utah natural gas eastward. He said even if the gas is exported, the state still would snag royalties.
Zavadil told lawmakers that the spot-market price for utilities in the West has been as low as 50 cents for a thousand cubic feet of gas, while East Coast prices for the same quantity have reached $14.
He said energy companies would have to curtail drilling if they couldn't get maximum return, which in turn would mean a cut in royalties and severance taxes paid to the states and the federal government.
Half the gas produced in Utah is already exported. Five pipelines now either proposed or under construction would ship gas to the West Coast and the Midwest, which in turn would free up gas for the Northeast. Consumer costs could equalize across the board, Zavadil said.
After the meeting, he said gas was selling for an average of $7.60 per thousand cubic feet now, but in Utah the price was closer to $4.
phenetz@sltrib.com


