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Wyoming Governor Tells Gas Industry to Stop Attacking Coal

Wyoming Gov. Dave Freudenthal has a message for the natural gas industry: stop attacking coal. "This is an incredibly dangerous premise to go forward on as a state and as a country," the governor said Thursday. "Once you go at each other's throat, nobody wins."

The governor, speaking at the 13th annual Wyoming Natural Gas Fair, didn't single out industry groups or specific companies. However, he alluded to America's Natural Gas Alliance (ANGA), which on Thursday pressed Congress to favor natural gas in any climate change and related legislation (see related story).

The battle for turf being fought between gas and coal producers benefits no one, Freudenthal said.

"It's important to me that this state have a level playing field," he told the audience. "Wyoming is one of the few states that understand that what this country needs is a fully diversified energy portfolio...

"There's a burgeoning conflict between the gas industry and the coal industry, and the only people who will win that at the end of the day are environmental groups," the governor said. "Both of you [gas and coal] are going to lose...As we go forward, in a year, two years, five years, it is clear that we will reemerge as a more energy-consumptive world...in the United States, China...Indonesia...Energy is what drives us, and if that's the case, and you look at the numbers, this country, this world, needs a diversified energy portfolio."

Wyoming supports gas, oil, coal, nuclear and renewable resources -- especially wind, Freudenthal noted. "I see you guys as my friends," he told the gas industry audience. "I don't like it when I watch my friends fight. This business between coal and natural gas, what the gas guys are doing, saying 'we'll show those coal boys...' In the long run, it's not a healthy circumstance.

"I hear you saying, 'those coal guys made out in the climate bill,'" said Freudenthal. "The way I look at it, nobody made out in the climate bill," which the House passed in June; the Senate is not yet considering legislation (see related story). The legislation, he said, "will get redone...and it will have some form of carbon management. When it does, I look for it to level the playing field. Every energy sector has a role to play, whether it's renewables...natural gas, oil. If it can do that, this country, this world will be better off. But if you spend your time and energy trying to gain a near-term market share at the long-term expense of the entire energy sector, we will all be losers."

Wyoming has to take the long view, said Freudenthal. "It isn't about what the price is going to be this quarter, this month...We have to balance the budget, which is a novel concept to the federal government...More important, the state has to be looking down the road to what it's going to look like in 10, 15 years out. Wyoming will be an energy exporting state, and we are going to be positioned to respond to the full demands of energy, and we will do that without being put in a position...without putting people at each other's throats."

The governor added that there is nothing to be gained by spending a lot of money to try and secure a short-term market advantage for a long-term disadvantage. "We know there will be disagreements, but it doesn't gain anything by beating on the other guy."

Freudenthal said he's said the same thing to the coal interests in his state. "Coal wants fracing [hydraulic fracturing] regulated. None of that helps. It doesn't help my state, and I have encouraged them to take the broader view, the longer term view...

"Like it or not, at the end of the day, we all have an interest in making sure this country and this world have a fully diversified energy mix...Other than that, I'm entirely neutral. It's troubling to me, and I hope we can get past this because I see the same thing in politics. It's evolving into the energy mix, and that's not healthy."

Wyoming's natural gas fetched an average price of about $5/Mcf in 2008, and this year, it might not break $3, Freudenthal noted. The state's budget has pegged the Wyoming gas price at $2.75/Mcf for the coming year. The governor said the state's gas price is bound to improve with El Paso Corp.'s proposed Ruby Pipeline, which would carry gas supplies from the Rockies to West Coast markets (see related story).

The state is working on a plan to possibly use its fixed-income portfolio of investments to invest in Ruby to ensure it will be built, said Freudenthal.

"I think that's an incredibly important line to Wyoming," Freudenthal said. "I think there's room in here to work out something for both sides."

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