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The cost of bringing cheap natural gas to Wendover is less than $15 million according to a feasibility study prepared by the Bonneville Research Group.
According to the study it would cost just a little over $9.1 million to build a 62 mile pipeline from West Wendover to the Ruby Pipeline running near the Idaho border to the north.
In addition to the pipeline cost would be the purchase of the Wendover Gas company valued at $2.5 million plus other cost involved in expanding the system.
To arrive at the estimate the study used a rule of thumb equation where the diameter of the pipe (4 inches) multiplied by the number of miles (62) multiplied by $40,000.
“It is a pretty basic formula,” said Wendover Gas trustee Steven Shute. “I have been involved in building pipelines for over 20 years and it is pretty accurate.”
Bringing natural gas to Wendover is an old dream. 15 years ago then Mayor Walt Sanders and City Manager Keyth Durham initiated talks with the company planning to build what would become the Ruby Pipeline. those talks however led nowhere. the pipeline was still in its planning stage and the cost estimated to be over $20 million for a spur line to Wendover was considered to be too high.
However even back then a supply of natural gas was considered crucial for Wendover to attract manufacturing industry. Now with the supply at all time highs and price at all time lows Wendover bid to diversify its economy is cripple without ready access to the product.
But while the estimate is attractive it may not be accurate.
“Laying pipe in Nevada is between $800,000 and $1 million a mile,” said financial analyst Paul Kvam. “If the City of West Wendover desires to purchase Wendover Gas, I ask the following question: Has the City conducted an engineering cost study to connect the present propane system to the Ruby Pipeline? How much would it cost? Does it make sense? How tough is the rock the trench would have to go through? (The cost of putting in natural gas pipelines can greatly vary depending on how tough the digging is). My point is that the value of the current system is dependent upon the cost of connecting the current system to natural gas. If it is not cost effective to connect Wendover Gas’ system to the Ruby Pipeline, then the City should not pay too much for the system.”
While the feasibility study gives its estimate there have been know geological studies yet connected on the route or proposed routes the pipeline would take. In fact very little is known of the area as it is one of the least explored parts of Nevada or for that matter the country.
“I flew over the proposed routes,” Shute said. “It looks like a pretty easy dig. It could either go through Montello or through Grouse Creek.”
“If West Wendover can build a 62 mile pipeline for that much send them to me,” Kvam said. “We are trying to build a 10 mile natural gas pipeline to Virginia City and our estimate is about $ 9 million.”
West Wendover is not the only entity with natural gas pipeline dreams. In December Barrick Gold announced that it would build a 24 mile spur line to Ruby and convert its entire gold mining operation from propane to natural gas. Barrick’s announcement was echoed by Newmont Gold whose representatives told a group of local officials that it would also build a spur line to its new Long Mountain project in the Pequop Mountains.
“i was very interested when they said that,” said West Wendover city councilman Izzy Gutierrez. “And I asked if we could hook up to it. they said that it was something we could talk about more.”
“The thing that should make anyone uneasy about this is this whole project is being done backwards,” Kvam added. “The city is buying the end point delivery system without first making any substantive study on the pipeline cost and believe me there are dozen of variables that could drive the cost way up. Not to mention those unforeseen surprises that happen on every project.”
Wendover has an especially long history of surprises. From the Toana Vista Golf course to the Wendover airport Expansion to the West Wendover City Hall no major project has come in anywhere near the estimated cost or generated anything near the estimated revenues.
