The New Mexico Gas Company has proposed a plant that would store liquified natural gas(LNG) in the Quail Ranch area, but several residents and environmentalists say this is a bad idea.
NMGC plans to have a 25-acre LNG facility on 160-acre parcel in Rio Rancho, within two miles of the Double Eagle Airport and Petroglyph National Monument and three miles of Volcano Vista High School. The facility stores 12 million gallons of LNG with a maximum liquefaction rate of 250,000 gallons per day.
NMGC argues that a liquified gas storage facility in Rio Rancho will avoid risks from gas price volatility.
LNG is fracked methane gas that is supercooled to -260 degrees Fahrenheit and compressed into liquid form and is kept at that temperature. Natural gas is derived from decaying organic materials and is odorless. It is a vapor in its natural state. However, companies sometimes add a chemical to the mix that allows them to smell it if there is a leak.
The main concerns of some environmentalists are the safety risks involved with LNG, the trucks transporting the material, property values and the cost.
“This is extremely expensive to keep this gas in its unnatural state of liquid. There are huge costs involved with storing it at the supercooled temperature of -260 degrees Fahrenheit,” Tyson Slocum, director of Public Citizen’s Energy Program, said at a community forum at Taylor Ranch Library July 18.
“When you are packing that much gas into a liquid form, you are also making it incredibly dense. So if there is some sort of failure with the equipment, you have an enormous quantity of gas in this liquid form that you wouldn’t necessarily have in the pipeline system,” Slocum added.
Slocum sourced several instances where LNG caused dangerous accidents in other states.
A tank-fueled generator in Louisiana ruptured and caught fire, an LNG facility in Seattle exploded, and LNG was being improperly stored and caused an explosion in another town in Washington, he said.
NMGC claims there is a rising demand for natural gas, which why it is converting to LNG.
Slocum referenced a graph that showed natural gas consumption every month since 1990.
“As you can see, it’s been relatively constant, and the peaks are similar to what we saw 25 years ago. This isn’t a lot of new demand that’s coming online. The question is, why do you need to invest in a $180 million ‘peak shaving’ facility that is not going to be doing much in terms of delivering value for consumers and definitely not for the environment?” he said.
New Energy Economy, which is dedicated to converting New Mexico to renewable energy, also explained how the public is affected by the cost of natural gas.
Health and safety risks to Rio Rancho, Bernalillo County and surrounding communities, according to NEE:
- Physical danger from the ignition of leaking gas forming a low-lying cloud that drifts until it hits an ignition source — even simple static electricity — and ignites an inferno.
- Depending upon wind and topography, such methane clouds can extend for miles.
- LNG production lines are rife with heavier hydrocarbons such as ethane and propane that present a higher risk of exploding.
- Emergency personnel (fire and hospital) require special training and equipment to respond to LNG fires. LNG poses unique safety risks, and related fires are extremely difficult to control.
- Proposed LNG tanker trucks will endanger New Mexico drivers and communities throughout the state.
- Impacts from boil-off gas and other necessary intermittent venting could increase cumulative emissions and further exacerbate existing air quality issues in Rio Rancho and Albuquerque.
“NMGC’s LNG facility is not cost effective. It does not protect against future price spikes and may even make us more vulnerable to them. The $180 million or more that could be charged to ratepayers to build the plant will not reduce exposure to price volatility because the capacity of the plant — less than half the contracted capacity from the current supplier in Texas — could mean that even more gas would have to be purchased on the swing market at high prices,” Chris Dodd, attorney for NEE, said.
He added that the real motivation for building the plant is the ability for NMGC to add $180M with a guaranteed 9.375% return on equity to rates for the next 30 years, resulting in at least $3 more for every NMGC customer each month.
Improvements and upgrades have been made to Keystone storage facility in Texas, including enhanced investments to prevent the kinds of freeze-offs that caused the shortage in 2021, and electric and gas coordination for critical functions.
“The proposed facility could decrease property values of nearby communities and will create just eight to 10 permanent jobs,” Dodd said.
According to NEE, new fossil fuel investments will slow the adoption of alternative fuel and ultimately turn into stranded assets when those alternatives become inevitable.
“Now is not the time to build new infrastructure that makes decarbonization more difficult,” Dodd said.
While Quail Ranch area is in Bernalillo County, it is in the lines of Rio Rancho.
The proposal for the plant is going to Bernalillo County Commission and Public Regulation Commissions for deliberation.
Timeline of upcoming PRC events:
- Public comment on Oct. 23
- Hearing begins Oct. 24
- Hearing examiner recommendation a month after
- PRC vote