NM Gas Co. defends proposed RR LNG plant

A group of environmentalists spoke to residents in Rio Rancho on July 18 in a community forum because they have concerns about the costs, health risks and property values that are involved with a proposed liquified natural gas storage plant in the Quail Ranch area.

However, the New Mexico Gas Company, which is in charge of the proposal, says the concerns and facts shared by the Public Citizen’s Energy Program and New Energy Economy are unwarranted or false.

“The LNG storage facility will be safe; it will improve the reliability of our system and it will help our customers save money by protecting them from radical swings in the market price of natural gas. Otherwise, New Mexico Gas Company would not be pursuing this project,” NMGC Manager of Communications Tim Korte said.

Korte explained that what was said about the safety of the facility was just not true.

“Our engineering plans will provide for a state-of-the-art facility that will incorporate safety and best practices from across the industry. There are more than 100 similar storage facilities operating elsewhere in the United States, and these facilities have operated safely over the past 40 years. Building on 40 years of experience and best practices across the industry, when our project is designed and engineered, all of the learnings of the past four decades will be applied,” Korte said.

The LNG storage facility will be designed as a closed system and will not normally emit any methane into the atmosphere. As designed, natural gas will come off their transmission pipeline to fill the storage tank. When it’s needed, the gas will be returned to the system for customer use.

Another concern was the truck transport of LNG and the impact it would have on traffic and drivers.

“The LNG storage facility will be designed so that, if needed, trucks can take on loads of liquefied natural gas and haul it elsewhere to meet New Mexico Gas Company’s operational needs. However, because the LNG storage facility is located adjacent to one of our transportation pipelines, we don’t anticipate that this will be a regular need, and heavy truck traffic will be limited at the site,” Korte explained.

Tyson Slocum, director of Public Citizen’s Energy Program, said a few words about how expensive the plant and liquidation process would be at a community forum at Taylor Ranch Library July 18.

“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,” Slocam said.

Korte says there are not huge costs associated with keeping stored LNG cool because no refrigerant is required to control temperatures inside the tank. Because stored LNG is super cold and the tank is insulated, the environment inside the tank keeps the LNG cooled.

“Of course, any recovery of the construction cost would result in an increase in customer bills, but that increase will also be offset by ending the stored gas lease, and we expect that the difference will more than offset the incremental costs that people might see from construction of the facility,” he added.

He also says the main reason for the storage facility is because it will help customers save money on natural gas. NMGC is planning to build a facility where LNG can be stored. The gas going into customer homes and businesses will not change.

During the regulatory proceedings, NMGC made an estimate of a $3 per month increase on the average bill for first three years while the leased space continues. After that, they estimate it will probably be about $1.50 per month. They believe this facility will more than save customers $1.50 per month.

“We currently have leased storage out of state in an underground salt cavern. Under our lease agreement, we have the right to withdraw gas during the winter and to have it delivered for use by our customers, and sometimes that has not happened. In a couple of instances, the out-of-state facility has not been able to get our gas delivered when we needed it for our customers. Because we want our customers to have reliable and affordable service, we feel that having an on-system facility located near our customers is a really good idea,” Korte added.

Korte also shared that after the Southwest experienced cold weather in February 2021, the regulator asked NMGC to look for a better solution to help protect customers from extreme price swings.

“This project is our proposed solution. By having a facility here in the Metro area, we will be able to withdraw the same amount of gas as we have done previously at our leased facility out-of-state, but the difference will be that New Mexico Gas Company will control the flow and timing instead of waiting for the gas to be delivered. We will have it right here close to our customers so they’ll get gas delivered when it’s cold and they need it,” he said.

The land where the proposed LNG storage facility is zoned for industrial use and not residential use, so Korte says property values will remain intact.

He also said that creating jobs with the facility was not an intention on NMGC’s part, even though it was brought up at the community forum.

Contrary to what was said at the forum, the facility will store one billion cubic feet with a maximum liquefaction rate will be about 200,000 gallons per day.

Additionally, all natural gas utilities add mercaptan, a chemical with a rotten egg odor, to natural gas as a safety measure to help customers detect a leak. If you ever suspect a gas leak, leave the home or business immediately. Don’t turn any appliances on or off and don’t use your garage door opener because any electrically powered devices could spark could ignite if gas is present. Once at a safe distance outside, call 911 and then call New Mexico Gas Company at 1-888-664-2726, which will send an expert to assess the situation and make it safe.

The full application for this project can be read at nmgco.com/userfiles/files/NMGC’s%20Application%20for%20Issuance%20of%20Cert%20of%20Convenience%20and%20Necessity%20.pdf.