As historically a dropping off point for major interstate natural gas pipelines, rather than a final destination, Arizona is intensifying its assessment of natural gas as part of a statewide energy plan now being drafted by Gov. Jan Brewer’s Energy Office.

Development and the eventual unveiling of a draft plan this fall is “evolving,” according to a senior policy analyst in the Energy Office. Presentations by four working groups writing portions of the plan will be offered to stakeholder meetings in the time leading up to an unveiling of a final document by the governor in January.

Academic, utility, business, regulatory and government agency representatives are members of each working group, and at least three of the four groups have discussed natural gas, the Energy Office analyst told NGI. For example, the Environment, Natural Resources and Land Use Work Group reviewed the current state of the industry, its challenges and a 10-year outlook for natural gas.

The other three work groups created following Brewer’s executive order last January are: Transportation, Fuels and Infrastructure Planning; Business, Regulation and Work Force; and Technology. In addition, in response to urging from the Federal Energy Regulatory Commission (FERC), the Desert Southwest Pipeline Stakeholders Group was formed by an executive at Arizona Public Service (APS) to help support FERC’s push for closer coordination between electric and natural gas utility operations.

What works in Arizona and the broader Southwest region is what the task force is focused on, said Tom Carlson, APS director of fuels, and the coalition chair. “This task force will probably provide comments just to FERC,” said Carlson.

While the transportation/fuels group has looked at compressed natural gas (CNG) and other alternative fuels for vehicular transportation, wrestling with questions about how stakeholders can make supply and distribution “more secure and redundant,” the environment/natural resources group wants to venture out 10 years and look at such subjects as natural gas storage, which has had a checkered past in Arizona (see Daily GPI, Feb. 23, 2010; July 14, 2009).

“We don’t have market area, local gas storage at all,” Carlson said.

As a result, for Arizona energy planners, the pipeline scheduling process and the firmness of cycling have to change to improve reliability, he said. “We have tried to get storage for years, but we have had challenges from the state on environmental issues because creating gas storage would require brine disposal, which uses water to create the storage in salt caverns,” he said.

Given the preciousness of water in Arizona, these geologic facts have created hurdles that various storage proposals so far have not been able to overcome. Those proposals are on hold, said Carlson, who noted that he has talked to the sponsoring companies for several years because of economic and environmental issues.

The pipeline group eventually will review its proposed FERC response with the major interstate pipelines in the area and some producers. Carlson said he hopes those companies will eventually join the Southwest collaborative and make the recommendations to FERC a consensus for the region’s major gas and electric operators.