TRAVERSING the broad, hard-beaten road with a CNG tiger in your tank could get cheaper if natural gas giant Chesapeake and invention king 3M build a better mousetrap of sorts.
A joint venture between Oklahoma City-based Chesapeake and Minnesota-based 3M aims to produce a CNG tank that's larger, holds more and costs less — and thus, the companies hope, fuel more interest in CNG vehicles.
The timing is good for any invention that would stimulate demand for natural gas, the price of which is currently so depressed that state officials have fretted about how much value it should have in the estimated tax revenues for fiscal 2013.
A supply boom coupled with a demand slump is keeping gas prices low. Even if successful, the Chesapeake/3M tank will take time to pump up demand for CNG. State officials can't wait. They must budget according to what they think gas will be worth in the fiscal year starting July 1 — specifically how much gas will contribute to gross production tax receipts.
In Wyoming, every 75-cent drop in the price of natural gas means the state loses about $133 million in expected tax revenue, according to Stateline.org. Oklahoma's collection of taxes from natural gas production came in at 16 percent below projections in January. On the eve of certifying revenues for fiscal 2013, state finance officials were debating whether the values — already adjusted for declining prices — remained too high.
On the other hand, oil prices are rising and could help offset the gas declines. But this is now much more of a gas state than an oil state. The mild winter has been a mixed blessing for Oklahoma. Not just here but in much of the country, home heating costs were lower this year and that translates to lower natural gas prices.
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