El Paso Corp.’s proposed Copper Eagle gas storage project is facing the equivalent of a public stoning in Arizona even before the company decides to move forward with a FERC filing. But El Paso spokeswoman Kim Wallace said the project isn’t dead yet, and is sorely needed in the Southwest where there are only a few storage fields, none of which are in Arizona.

Copper Eagle would include up to three gas storage caverns created out of an existing salt formation thousands of feet beneath the earth’s surface in Phoenix’s West Valley. Each cavern would have a withdrawal capacity of 320 MMcf/d, an injection capacity of 160 MMcf/d and a working gas storage capacity of 3.2 Bcf (see NGI, Sept. 1, 2003).

Despite record high gas prices and a dearth of storage capacity in the region, including only one field on El Paso Natural Gas that is used solely for balancing, landowners, local political leaders and even the top brass at nearby Luke Air Force Base are up in arms against the project.

Copper Eagle has prompted state Rep. John Nelson, (R-Phoenix) to introduce House Bill 2134, which would prohibit gas storage facilities (including above-ground LNG tanks) with a capacity of more than 500 Mcf from being built within three miles of the border of a municipality, airport or military airport.

The Litchfield Park City Council unanimously voted to join other cities in opposing the storage facility and to support Nelson’s legislation against it. The Maricopa County Board of Supervisors also voted to oppose it, and West Valley cities are preparing to follow suit, according to a report in the Arizona Republic.

Why all the opposition to a project that could help reduce extremely high natural gas prices?

Locals believe that gas storage simply isn’t safe, and certainly shouldn’t be located only a mile away from an elementary school, a hospital, a residential neighborhood and an Air Force Base that serves as the foundation of the local economy.

Locals also are on edge about the project because of two propane leaks that occurred in 1987 and 1988 at a storage facility next to the proposed Copper Eagle site. The leaks caused evacuations in the area and the temporary closure of Luke Elementary School, the Arizona Republic reported.

Furthermore, they are all too familiar with El Paso’s safety record in the region. A pipeline explosion on El Paso Natural Gas in 2000 near Carlsbad, NM, killed 12 campers.

But El Paso’s Wallace said the storage project would be safe. She also noted that gas storage is sorely needed in the region, which is seeing substantial gas demand growth.

“It’s not a dead project. We still think it’s a good project. We are continuing to work with the local communities to educate them about the safety of natural gas storage,” said Wallace.

“We will definitely have a safe project,” she said, noting El Paso is the largest storage operator in the United States. “This will be a brand new facility. But it’s not even at the public meeting stage yet. It’s too early to step out and start having the meetings. We’ve had a non-binding open season. We’re going to have a binding open season beginning next month.”

Wallace said that during the latest non-binding open season the company received expressions of interest from customers for about 9 Bcf of storage capacity. The first 3.2 Bcf cavern wouldn’t be available until 2007.

“We feel like it will help Phoenix with their future energy needs,” Wallace added. “The projections for energy needs in Arizona and in the Phoenix area are pretty incredible.”

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