PHOENIX - A cross-border natural gas project seen by some as an environmental threat and others as an energy necessity is moving forward.
A federal regulatory agency has authorized a Canadian pipeline company, Calgary, Alberta-based TransCanada Corp., to modify the U.S. segment of a pipeline from Mexico to allow it to carry natural gas into Arizona and California. The gas would be brought north from an unloading facility being built by San Diego-based Sempra Energy near Ensenada on the coast of Baja California.
The pipeline currently is used to send gas south to users in Mexico. The modifications approved by the Federal Regulatory Commission involve nearly tripling the pipeline's capacity and allowing it to carry gas north into the United States as well as southbound.
Some California state officials have voiced environmental concerns about the type of gas involved because it could increase emissions, but an Arizona utility regulator said he didn't share those concerns.
Emission restrictions on power plants and other gas-burning facilities will protect Arizona's air quality, said Corporation Commission member Jeff Hatch-Miller.
"We definitely need additional gas supplies in Arizona and this is one avenue," said Hatch-Miller, citing the state's growth.
The pipeline will carry gas unloaded from ships that carry it in liquid form from overseas. The gas, which will enter the United States near Andrade, Calif., is intended for unspecified users in Arizona and California.
TransCanada said Friday it needs no additional regulatory approvals for the project, and spokeswoman Shela Shapiro said the bi-directional switch will take place in early 2008, followed later by construction of the larger pipeline.
The gas will be delivered to Southern California Gas Co. and El Paso Gas Natural Gas Co. pipelines at Ehrenburg, along Interstate 10 just east of the California-Arizona border. Both companies supply gas to power plants and other users. The pipeline spans 220 miles, including 80 miles in the U.S.
The project comes at a time when California utilities, including Southern California Edison and Sempra's San Diego Gas & Electric, are attempting to build more east-west electricity lines to access power from out-of-state generating plants, including some near Phoenix.
A California smog agency, the South Coast Air Quality Management District, contends that the imported gas carried on the North Baja pipeline poses environmental risks and unsuccessfully asked the federal commission to consider possible environmental consequences.
The so-called "hot" gas has a different chemical composition and higher heating content than natural gas currently used in Southern California, and the air quality district contends burning it can increase emissions of nitrogen oxides, a cause of ozone and fine particulate pollution.
In its order issued Tuesday, FERC said those possible consequences would not be tied to the pipeline project, could happen whether or not the project is completed and were outside the commission's regulatory authority.
"The end use facilities in the proposed project's market area, be they generation facilities, industrial plants, businesses or homes, are already in place and in operation," the order stated.
The California Land Commission had endorsed the project - which involves using some state land - on the condition that the pipeline's operators mitigate any air-quality harm from burning the gas.
The federal commission, which said in an earlier order that the project would provide "a much-needed new source of natural gas to the southwest region of the United States," declined to include the requirement sought by California Lt. Gov. John Garamendi on behalf of the Land Commission.
Over the objections of the air district, the California Public Utilities Commission in September 2006 approved a standard that will allow energy providers to burn the gas to generate power. The PUC's president said the standard would help ensure future natural gas supplies for California.
Hatch-Miller, the Arizona utility regulator, said he's not a big fan of increased reliance on imported liquid natural gas because of concerns about dependence on foreign energy.
However, natural gas burns cleaner than coal and it's not likely that nuclear power and renewable sources will produce enough additional energy quickly enough, Hatch-Miller.