Gas industry eager for market reach of new pipeline

The expected completion of the Ruby Pipeline is just under six months off, but it can’t come too soon for energy companies in the Piceance Basin.

The Ruby Pipeline, a $3 billion project, will carry natural gas from wells in the Rocky Mountains to markets on the West Coast.

“Just like when the last leg of the Transcontinental Railroad was finished, lots more product could be moved to lots more places,” said David Ludlam, executive director of the West Slope Colorado Oil and Gas Association. “The Ruby is our transcontinental. Short-term and long-term benefits will result as western Colorado competes for future investment in the region’s abundant natural gas resources.”

For the moment, energy companies are looking elsewhere for profits, especially with efforts to capitalize on an oil find in eastern Colorado and so-called wet-gas reservoirs in other formations around the country.

Energy companies such as BJ Services, Exxon Mobil and Noble Energy have shifted their focus from the Piceance Basin while noting they remain committed to the region.

The Piceance remains “one of our key business areas,” said Jon Ekstrom, spokesman for Houston-based Noble Energy. The company, however, is shifting resources from the Piceance to more lucrative resources elsewhere because of relatively low natural gas prices.

“It’s the ebb and flow of business,” Ekstrom said.

Once the Ruby Pipeline opens, producers in the Piceance Basin will be able to choose between markets to the east and west rather than just those to the east, said Carter Mathies, president of Clover Energy Services Inc. in Grand Junction and an industry observer.

“The remaining issue is that the country is oversupplied and will continue to be so until we see meaningful recovery in the manufacturing sector,” Mathies said.

The Ruby Pipeline, which former Gov. Bill Ritter lobbied the Obama administration to approve, will stretch 680 miles from the Opal Hub in the southwest corner of Wyoming to Malin, Ore. The 42-inch pipeline has an initial design capacity of up to 1.5 billion cubic feet per day.


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