April 14, 2025
Docket Control
Vice Chair Nick Myers
Arizona Corporation Commission
1200 W. Washington Street
Phoenix, AZ 85007
RE: Commission Inquiry: Natural Gas Infrastructure and Storage – Docket No. G-00000A-25-0029
Dear Vice Chairman Myers,
I am writing to you as President of the Western States and Tribal Nations Energy Initiative (WSTN) to address issues regarding Docket No. G-00000A-25-0029 to address the expansion of natural gas infrastructure and storage in Arizona.
WSTN is a bipartisan, trans-national initiative led by sovereign tribal nations and states focused on creating rural economic development, advancing tribal self-determination and reducing global emissions through the development of markets for clean natural gas from western North America for international and domestic consumption. It began as a bipartisan effort under former Colorado Gov. John Hickenlooper and former Utah Gov. Gary Herbert, and is now an established 501(c)4 organized under a Memorandum of Understanding between sovereign tribal, state, and county governments including:
- The Ute Indian Tribe
- The State of Utah (Utah Governor’s Office of Energy Development)
- The State of Wyoming (Wyoming Energy Authority)
- The State of Baja California, Mexico (Ministry of Tourism and Economic Development)
- The State of New Mexico (Energy, Minerals and Natural Resource Department)
- The Western Colorado counties of Garfield, Mesa, Moffat and Rio Blanco
- The Southern Ute Indian Tribe
- The Jicarilla Apache Tribe
- The Province of Alberta (Pending)
Overview
As ACC Vice Chairman Nick Myers opened docket G-00000A-25-0029 to inquire into the expansion of natural gas infrastructure and storage in Arizona, he stated “Resource adequacy for our electric utilities is a growing concern in Arizona. The closure of coal-fired power plants, the increased dependence on intermittent resources, and the projected load growth due to data centers and large industrial customers are requiring substantial firm capacity from natural gas generation to maintain reliability and resource adequacy,”
“However, there are significant gas supply constraints. Simply put, Arizona lacks the natural gas infrastructure needed to meet the growing demand.”
“Further, the significant economic impact of winter storm Uri in 2021 on Arizona electric and gas customers revived discussions about the benefits of developing a large natural gas storage project in Arizona. To be sure, this would be an ambitious project; however, some estimate that it could pay for itself after one ‘Uri-like’ event,” Vice Chair Myers said.
WSTN strongly supports the ACC initiative to address Arizona’s critical natural gas infrastructure and storage needs. We agree with your assessment that resource adequacy for electric utilities is a growing concern given the closure of coal-fired plants, increased reliance on intermittent resources, and projected load growth from data centers and industrial customers.
The Rockies natural gas basins represented in the WSTN coalition including the San Juan, Piceance, Uintah and Green River basins, hold tremendous reserves to support Arizona’s current and future energy needs while providing critical elements of energy diversity, low methane intensity, energy security, support for the tribal and rural economies in the Four Corners area, as well as key political support needed to develop natural gas infrastructure to meet growing demand.
As the Arizona Corporation Commission considers various pathways toward sourcing natural gas supplies for the Arizona economy, we encourage you to consider the following key factors in support of San Juan and other Rockies natural gas basins.
San Juan and Rockies Resource Base
Our states and tribal nations hold tremendous natural resources that have the ability to meet the growing energy demand in Arizona, while creating tangible benefits in the rural and underserved communities of both Arizona and New Mexico including the Navajo Nation. Recoverable natural gas from our western basins is estimated to be 437.1 trillion cubic feet1. Natural gas from our basins has among the lowest methane and carbon intensity in the world; and there is more than enough natural gas to support Arizona’s needs as well as other domestic markets and, prospectively, international markets.
Critically, the San Juan Basin holds reserves that can be rapidly scaled to meet demand. Recent reserve studies based upon the past 5 years of exploration in the San Juan Basin’s Mancos shale predict that there is over 60 trillion cubic feet (TCF) of economically recoverable natural gas, meaning the San Juan Basin will rank amongst the top 5 natural gas producing basins in the U.S. It is now accepted that drilling 48 wells per year can deliver gas production of over 1 BCF/day of new volume in less than 5 years. Importantly, the gas that produced is proven to have an extremely low methane intensity of approximately 0.003%.
This represents one of the largest natural gas discoveries in recent years and is geographically well-positioned to serve Arizona markets.
The Rockies basins (San Juan, Piceance, Uintah, and Green River) offer a geographic proximity advantage to Arizona compared to many other supply sources, potentially reducing transmission costs and infrastructure requirements while enhancing supply security during extreme weather events.
Diversification and Energy Security
The diversification of supply sources that would come from increased Rockies gas integration would significantly enhance Arizona’s resilience against the type of disruptions experienced during Winter Storm Uri, which as noted, had significant economic impacts on Arizona electric and gas customers.
The Permian Basin, which is also being considered to supply natural gas to Arizona, has considerable current and future demand with an existing 25 bcf/day inventory of natural gas delivery and with a 10 bcf/d demand forecasted for New/Upcoming pipelines and recent pipeline expansions, including:
- Apex – 2.0 Bcf/d to Port Arthur, TX (2026)
- Blackcomb – 2.5 Bcf/d to Agua Dulce (2026)
- Saguaro Connector – 2.8 Bcf/d to US-Mexico border (2027-2028)
- Matterhorn Express – 2.5 Bcf/d to Katy, TX (2024)
Pipeline operators have also announced other projects with a total capacity of 7.0 Bcf/d designed to transport natural gas from the Permian Basin to demand centers in Mexico and along the Texas Gulf Coast.
These projects, if realized, could come into service between 2025 and 2028.
Thus, the demand on the Permian including current Inventory, new upcoming, and planned, will equal a total of 42 bcf/day, which is a staggering sum by any estimation. All of these projects will direct Permian gas to the U.S. Gulf Coast or to the Mexican markets.
Energy Security is a key factor in making decisions on natural gas infrastructure and supply. It is worth noting that Rocky Mountain Natural Gas is not tied to any other energy commodity. Natural gas produced in the Permian is associated gas and is reliant on oil production, which makes the supply of natural gas vulnerable to the price swings and geopolitics of international oil markets including OPEC price manipulation. When the price of oil drops, oil production drops, and correspondingly, so does natural gas production.
Infrastructure Development Recommendations
New pipeline infrastructure connecting Phoenix with gas production from the San Juan Basin and Rockies has the potential to unlock further development of emerging gas plays, such as the Mancos Shale. This expansion would enhance energy security by providing access to diverse gas supplies that are not directly tied to the price of oil.
There is existing capacity on the TransColorado pipeline where the Piceance (Colorado) and Uintah (Utah) can feed into the San Juan hub in northwest New Mexico. The Northwest Pipeline – Uinta and Piceance can also feed into the San Juan hub. The Marcellus and Green River basins could be accessed via Rockies Express which would require re-purposing and expansion of existing infrastructure.
Several WSTN member tribes hold significant land and resources along potential infrastructure corridors. Collaborative development with tribal authorities could expedite permitting while supporting economic development and tribal self-determination for these sovereign nations and their people, mutually benefiting Arizona’s energy security and tribal sovereignty.
Consideration might also be given to working with LNG exporters (Energía Costa Azul and Mexico Pacific) to divert natural gas supply from LNG facilities to Arizona during Uri-like events or events that create capacity shortages in the future. It is in the ratepayers’ best interests to assure projects are developed jointly on an interim basis and a long term new build expansion basis to benefit Arizona’s energy security and maximize utilization of critical tribal sovereignty and ROW commitments
Tribal Participation in the Arizona Economy
Promoting tribal sovereignty through resource development is a key tenet of the WSTN mission.
Energy producing tribes in the western states would also benefit from a Rockies route to supply natural gas to Arizona. These tribes include the Ouray and Uintah Tribe of eastern Utah (Uintah Basin), the Southern Ute Indian Tribe of southwestern Colorado (San Juan Basin), the Jicarilla Apache Nation located in northwestern New Mexico (San Juan Basin) as well as the Navajo Nation. These sovereign Tribal Nations are major energy producers and revenues from natural gas contribute significantly to funding government services to Tribal members.
The Tribes use oil and gas revenue to invest in other tribal businesses, and their respective tribal oil and gas companies are a major source of employment and an engine for economic growth in tribal communities.
Sourcing gas for from the San Juan, Uintah, Piceance and Green River Basins would increase the Tribes’ income and assist in its ongoing efforts of economic development and providing essential services for its tribal members.
For the Tribal Nations in the Rocky Mountains production area, their lands are ancestral homelands. Rather than looking for an exit, our tribal members are looking for ways not to be displaced. These are independent and sovereign Nations are committed to the development and long term futures of their people.
A decision to source natural gas from the Permian basin only and bypassing these sovereign Tribal Nations would prevent them from realizing the economic and social benefits from participating in the growing Arizona economy.
Tribal participation in Arizona’s economic growth supports tribal sovereignty and self-determination as well as economic development throughout the rural West.
Economically Disadvantaged Communities
Promoting rural economic development is also a core tenet of the WSTN mission.
Many rural and tribal communities in our member western states and tribal nations are classified as “Economically Disadvantaged Communities” due to coal plant closures and lack of access to markets for their natural gas resources.
These rural/tribal communities are isolated from larger urban markets, have high rates of poverty, and have a large numbers of residents with language barriers are likely to more acutely feel the loss of a major employer like the Navajo Generating Station and the Four Corners Generating station, two events with major negative impacts on the Four Corners area.
The Farmington, NM population, which is located in the San Juan basin, is currently declining at a rate of -0.19% annually and has decreased by -0.75% since the most recent census (2020). Farmington has a poverty rate of 20.75%.
Within the Navajo Nation, 35.8% of households have incomes below the federal poverty threshold. This is in comparison to 12.7% of all households nationally. Infrastructure development offers a crucial opportunity to revitalize disadvantaged communities. By providing access to reliable energy sources and creating new job opportunities, this infrastructure can serve as a catalyst for stimulating local economies and fostering long-term growth. Furthermore, prioritizing community engagement and incorporating feedback from local residents ensures that the unique needs and cultural values of these communities are respected and integrated into the emerging energy landscape. This approach not only promotes economic resilience but also empowers residents to actively participate in shaping their energy future, ultimately leading to a more equitable and sustainable energy environment for all.
Meeting Data Center and AI-Driven Demand
Arizona’s position as the largest AI/cloud market in the Western U.S. creates unprecedented urgency for reliable baseload power. The current pipeline capacity into Arizona is insufficient to meet projected demand growth from data centers, which require substantially more power than traditional computing facilities. As we noted in our recent Southwest Carbon Capture and Sequestration Hub meeting in Phoenix last September, AI uses 10 times the power consumed by one Google search, which means the increase in electricity demand is the largest in a generation.
Wind and solar generation alone cannot meet this demand because of their intermittency issues and the fact that battery storage technology is not yet developed enough to ensure that power from intermittent, weather-dependent resources is up to the 24-7-365 uptime data centers demand. These facts make natural gas infrastructure expansion essential for maintaining Arizona’s competitive position in attracting technology investment. The combination of expanded pipeline capacity from diverse supply sources and in-state storage would provide the reliability that “hyperscalers” require for long-term investment commitments.
Environmental and Economic Benefits
Gas from our basins has among the lowest methane and carbon intensity in the world due to stringent state regulations limiting flaring and requiring advanced leak detection and repair. As our Chairman Jason Sandel recently noted in an opinion piece, “While the Permian routinely flares off gas, New Mexico’s operators may only do so under specific conditions that limit the practice.” Neighboring states like Wyoming, Colorado and Utah have similarly low-methane gas, which is good for the environment and is sought after by importing nations.”
Creating stronger market connections between Arizona and the Rockies region would support economic development in rural and tribal communities while securing Arizona’s energy future. The San Juan Basin and broader Rockies region have what Chairman Sandel described as “the balance sheets, technical know-how and workforce for successful, long-term production” necessary to reliably develop these resources over the coming decades.
New pipeline and storage infrastructure can be designed to accommodate future low-carbon technologies, including hydrogen blending and carbon capture utilization and storage. This forward-looking approach aligns with WSTN’s expanded mission to include support for decarbonization efforts.
WSTN welcomes the opportunity to participate in your upcoming workshop on natural gas infrastructure and storage. We would be pleased to present more detailed information on our ongoing pre-feasibility study examining future energy infrastructure needs connecting the Rockies basins to western markets.
This study, supported by the Wyoming Energy Authority, the State of New Mexico Economic Development Department, the State of New Mexico Energy, Minerals and Natural Resources Department, the Utah Governor’s Office of Energy Development, the Southern Ute Indian Tribe and the Jicarilla Apache Nation is identifying and evaluating major infrastructure initiatives that would open new markets for natural gas and future energy options including hydrogen and decarbonized ammonia from WSTN member states and tribal nations.
We can also offer insights into specific pipeline corridor options to increase Arizona’s access to Rockies gas, as well as cooperative models for infrastructure development that maximize benefits for all stakeholders.
We encourage the Commission to conduct a workshop in the Four Corners area to further examine the potential for Rockies/San Juan natural gas to supply Arizona markets, and would be happy to support such an event.
We appreciate the opportunity to comment and look forward to working with the Commission and other stakeholders to develop solutions that enhance Arizona’s energy security while supporting responsible resource development throughout the West.
Sincerely,
Andrew Browning
President, Western States and Tribal Nations Energy Initiative