Presidio to study natural gas distribution system feasiblity

Border infrastructure initiatives

PRESIDIO – The city of Presidio has long depended on propane for fuel, but a new study is hoping to turn the tide and change the city over to natural gas.

The North American Development Bank (NADB) is underwriting the study, which will examine the feasibility of Presidio transitioning to natural gas, now that the fuel is available in Presidio through the TransPecos Pipeline.

The study will look at the costs for creating a natural gas distribution network, and switching commercial and residential properties to gas. It will decide if natural gas is a financially viable option.

The TransPecos Pipeline reaches to the U.S.-Mexico border near Presidio, where it crosses under the Rio Grande and connects to a system of pipelines that travel throughout Mexico. Though Mexico will be the primary natural gas customer of the pipeline eventually, Presidio was able to negotiate the addition of an access point near the city.

The pipeline was completed in 2017, and according to Energy Transfer spokesperson Lisa Dillinger, the pipeline is “commissioned, and it’s ready for service.” Dillinger confirmed there is natural gas in the line, but says that so far, Mexico is only purchasing very small amount.

Coyne Gibson is a former oil and gas worker and volunteer with the Big Bend Conservation Alliance (BBCA,) which protested the pipeline for years. He was heavily involved in fighting the pipeline, but on the topic of Presidio’s new study, Gibson said, “If there is a silver lining to the TransPecos Pipeline project, it’s the benefit of providing gas to Presidio.”

Gibson explained that the NADB “look at lots of these fundamentally rural infrastructure projects. They look at whether it will be cash flow positive in the long term.” If they can determine that with the feasibility study, the project will then move forward in search of a private gas company to distribute gas to businesses, and maybe homes, in Presidio.

As soon as the Presidio natural gas tap was available, Biad Chili Company constructed a multi-million-dollar plant in Presidio. The company is the sole user of natural gas in Presidio right now, and only operates seasonally, from September to January each year.

According to Presidio Municipal Development District (PMDD) Executive Director Brad Newton, the plant creates 45 seasonal jobs, with six people remaining on staff year round.

If the feasibility study successfully determines that switching to natural gas would be profitable, the PMDD is hoping to replicate their success with Biad Chili Company, and attract new companies to the Presidio business district. Having a feasible natural gas plan would be a motivator for businesses to come to Presidio. Newton also hopes that businesses already operating in Presidio will be able to switch from propane to natural gas, which he says is more affordable, and is a clean burning fuel.

“We’re trying to build a good infrastructure for the future Presidio to build on top of. Improving our water systems, sewer systems, having natural gas, new electric grid, internet—Fiberlight and Big Bend Telephone.” Even though these changes often can’t be seen with the naked eye, the tax-funded PMDD is hoping these changes will attract a variety of industries to the business district.

Newton says that although nearby cities like Mar-fa, Alpine, and Fort Stockton have public ownership of their gas companies, he believes Presidio might be better off with a private vendor. He thinks that the potential financial gains are not significant enough to take on the risks associated with running a gas company. He prefers the private option because then the city can collect property and franchise taxes on the gas company and its infrastructure, without the many liabilities that come with natural gas. Newton said if the utility was owned by the city and there was a gas leak, the city would have to buy all of the gas leaked. They bear none of that responsibility if it’s a private company operating instead.

The pipeline was built by Energy Transfer Partners, now called Energy Transfer, despite a grassroots campaign to prevent the environmentally disruptive construction, and the subsequent risks that come with pipelines like these. Last year, an Energy Transfer natural gas pipeline, like the one through Presidio County, exploded in Pennsylvania, causing fires that destroyed homes and property. Another Energy Transfer pipeline in East Texas burst in 2015, causing an explosion in the town of Cuero.

Along with the past pipeline construction, Presidio residents may have already seen crews building the compressor station, or heard the station completing loud tests before they installed massive mufflers to quiet the operation. Though the compressor station is now nearly completed, Energy Transfer has no intention of operating the station anytime soon. Because so little gas is going to Mexico currently, there is no need to add pressure to the pipeline to push the gas through rapidly. When in operation, it will operate to compress the pipeline contents to send a massive volume of natural gas through to Mexico.

Gibson of the BBCA was hesitant whether residential use would be a viable option for Presidio residents. “To transfer from propane to natural gas, there’s a customer cost to change or replace appliances that use propane to ones that use natural gas. If you’re a restaurant that uses propane, there’s probably economic reasons to change to natural gas. As for residential customers, there’s not a significant driver to change over.”

Presidio resident Mae Ridgeway lives by the compressor station and said it was disturbingly loud before mufflers were installed. Ridgeway, like Gibson, is skeptical of the pipeline, and of any residents switching over to natural gas.

She said, “I don’t know what they’re doing with the gas they’re sending down in it, because Mexico isn’t accepting it. The one customer they do have is seasonal, and is already shut down for the season. Nobody is going to buy the gas down here; it would be very expensive for everybody to change over the heating and cooking systems from propane to natural gas.”

According to the feasibility study proposal by the North American Development Bank, the multinational bank explains they were “created to provide financing, as well as technical and other assistance, to support the development and implementation of infrastructure projects that help preserve, protect and enhance the environment of the border region to advance the well-being of the people of the United States and Mexico.”

Only a few paragraphs later, the NADB states, “As a demand-driven institution, NADB seeks to capitalize on business opportunities that help further its mission, such as the increased activity in the natural gas (NG) sector along the U.S.-Mexico border.”

Newton explained that the bank’s primary interest is border development, and that they are funded by both the US and Mexican governments. They do collect a low interest on any loans, but primarily focus on creating infrastructure through government funding. The bank’s feasibility study is in early stages, and is putting out a request for proposals to find a company to carry out the study.