Sierrita Pipeline project: just the basics

sierrita-pipelineA new lateral pipeline in Arizona to serve customers in Mexico with supplies of natural gas was announced by El Paso Natural Gas in 2012. The 60 mile long Sierrita Gas Pipeline would pass through Pima County and interconnect with a $1 billion 500-mile, pipeline network connecting the northwestern Mexican states of Sonora and Sinaloa.

Mexico is hoping the project will help it meet its environmental goals by converting existing fuel-oil-fired power generation plants to natural gas, and Arizona is hoping it will provide much needed jobs as well as nurture positive business relationships with Mexico; one of its biggest trading partners.

According to the U.S. Fish and Wildlife Service, “The southern part of the Pipeline route travels approximately 100 feet west of the Buenos Aires National Wildlife Refuge (Refuge) boundary. Along most of its length, the Pipeline would be buried. During construction, Sierrita would create a 100 to 150 foot-wide right-of-way. Following construction, that portion of the right-of-way no longer needed would be restored. Restoration success would be monitored for at least 5 years.”

According to Kinder Morgan, owner of EPNG, “When Sierrita initiated the pre-filing process, two potential routes were identified: an eastern route that runs through the Buenos Aires National Wildlife Refuge (BANWR), and a western route that would be routed to avoid the BANWR. The consideration of the eastern route on the BANWR was driven mainly by the fact that the route would be co-located along the existing State Highway 286 and parallel to an existing low voltage power line. However, recognizing the environmental sensitivities and permitting/siting restrictions associated with constructing a pipeline through a national wildlife refuge, Sierrita was committed to working with the BANWR management. After extensive work and consultation with both the local BANWR management, as well as regional and national management of the National Wildlife Refuge System, the BANWR has indicated that it will not find Sierrita’s project compatible with the mission of the refuge, which will effectively deny Sierrita the ability to permit the eastern route. Therefore, Sierrita has determined that the western route, which avoids the BANWR entirely, is the preferred route.”

Reportedly, in an effort to avoid the wrath of the environmentalists, the preferred route may require infringing on private property rights.

In August of 2012, the staff of the FERC issued a notice of intent to prepare an environmental impact statement for the proposed project. On February 7 and 8, 2013, Sierrita filed applications with the FERC for authority to construct and operate the pipeline and for the related facilities at the United States – Mexico border. Under Federal law, FERC is responsible for evaluating applications to construct and operate interstate natural gas pipelines. The FERC is also the lead federal agency for the preparation of the Environmental Impact Statement for this project.

The Final Environmental Impact Statement (“FEIS”) for the project was March 28, 2014. The FEIS concluded:

“We determined that construction and operation of the project would result in limited adverse environmental impacts. This determination is based on a review of the information provided by Sierrita and further development from data requests; field investigations; scoping; literature research; alternatives analyses; and contacts with federal, state, and. local agencies, Native American tribes, and other stakeholders. We conclude that the approval of the Project would have some adverse environmental impacts, but, with the exception of the Pima pineapple cactus, these impacts would be reduced to less-than-significant levels.”

According to the USFWS:

The purpose and scope of the environmental review undertaken by the FERC staff, as described in the FEIS, was to:
• Identify and assess potential impacts on the natural and human environment that would result from the implementation of the proposed Project;
• Describe and evaluate reasonable alternatives to the Project that would avoid or minimize adverse effects to the environment;
• Identify and recommend specific mitigation measures, as necessary, to minimize environmental impacts; and
• Encourage and facilitate involvement by the public and interested agencies in the environmental review process.

Cooperating agencies in the preparation of the FEIS included the U.S. Fish and Wildlife Service (“USFWS”) – Arizona Ecological Services Office, the Buenos Aires National Wildlife Refuge, Arizona G8lne and Fish Department and the U.S. Customs and Border Protection.

The FEIS was issued only after extensive analysis from FERC and the incorporation and consideration of numerous stakeholders, including Pima County. Indeed, since Sierrita filed its initial certificate application more than a year ago, FERC issued more than 250 data request questions, at times in direct response to stakeholder comments. Sierrita has exhaustively and satisfactorily responded to each data request question.

Kinder Morgan reps Bill Biggs & Allen Fore met with Tucson Mayor Jonathan Rothschild to discuss Kinder Morgan assets in Tucson & Pima County, Ariz.
Kinder Morgan reps Bill Biggs & Allen Fore met with Tucson Mayor Jonathan Rothschild to discuss Kinder Morgan assets in Tucson & Pima County, Ariz.

In addition, FERC has received and reviewed more than 130 separate comments filed by landowners, agencies, and other stakeholders as part of the FEIS development. Sierrita has responded to each material comment filed by stakeholders.

Sierrita has agreed to fund habitat restoration in the amount of $2.3 million through the Flood Control District as a condition for the issuance of the Floodplain Use Permit.

Kinder Morgan Energy Partners, L.P. (NYSE: KMP) is a pipeline transportation and energy storage company. It owns an interest in or operates approximately 46,000 miles of pipelines and 180 terminals. Its pipelines transport natural gas, gasoline, crude oil, CO2 and other products, and its terminals store petroleum products and chemicals and handle such products as ethanol, coal, petroleum coke and steel.

While 92 percent of the public land utilized for the pipeline is owned by the Arizona State Land Department (“ASLD”) and only 2.2 percent is owned by the County, the County is expected to gain approximately $1.6 million in annual property tax revenues that will be received directly by the County from Sierrita, and approximately $3.3 million of additional annual property tax payments that will benefit local fire and school districts in Pima County, according to Sierrita’s president Mark Kissel.

Related article:

The Pima County Kinder Morgan Shakedown

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