Apr. 28—The CMC Steel Arizona plant in southeast Mesa is planning a $300 million expansion, adding a new "micro-steel" mill to the company's campus at Pecos and Meridian Roads.
After its expected 2023 opening, the new mill will melt down scrap metal and churn out new steel products like t-posts and rebar, which is used to reinforce concrete structures.
Using scrap metal instead of ore enhances the mill's sustainability factor, and the company has innovative plans to build onsite solar that can connect to the mill's electric arc furnace.
But CMC will also need natural gas to pump out its estimated 500,000 tons of steel product annually, and the company has requested a new natural gas line from Mesa's gas utility to supply large volumes of the fossil fuel to the facility.
City Manager Chris Brady told City Council at April 14 that CMC's request for more natural gas is part of a broader trend: companies setting up shop in Mesa are requesting new natural gas hook ups from the city, including some very large users.
Brady's discussion of the CMC project highlighted the city's interest in using natural gas to fuel its economic growth, prompting reflections by Brady, Mayor John Giles and Councilman Kevin Thompson on how that policy fits in with Mesa's climate goals.
"A lot of the developers coming in now are finding much more economical or efficient ways to reduce their water consumption, but on the gas side, it's becoming a huge demand for us," Brady said.
Brady told Council he is excited about the new demand for natural gas. For one, he said, selling higher volumes of gas is good for the financial health of the city's gas utility.
But Brady appeared even more enthusiastic about natural gas as a tool to help the city lure business to Mesa.
The need for large volumes of natural gas and electricity in some industries is "driving a tremendous amount of opportunity for us to bring enterprise and industry to Mesa," Brady said.
CMC's new micro mill is an example of how the city can use utilities to entice companies to come to Mesa: the city agreed to finance construction of the $16 million gas line extension to encourage the company to expand in Mesa.
The city is providing all the upfront costs, but CMC will reimburse Mesa over five to seven years once the mill starts up.
During the discussion, Brady and Giles acknowledged that throwing open the spigot on natural gas might appear, at first glance, to be at odds with the vision to wind down the city's carbon footprint contained in the Mesa Climate Action Plan, passed by council last year.
Included in the No. 1 "aspirational goal" of the plan is "Strive to reduce the carbon footprint of City Operations by 50% by 2030" and be carbon neutral by 2050.
But at the same time the city is trying to reduce its carbon footprint, it will also be increasing its distribution of natural gas, which releases CO2 when burned.
Mesa Electric & Gas Utility Director Frank McRae told the Mesa Tribune he expects natural gas deliveries from the utility to grow 10% to 20% in the next two to five years.
Is that ironic or logical? Depends who is answering.
Natural gas is often described as a "clean" fossil fuel by advocates, seen as a cleaner way to power the economy while renewable energy sources scale up.
One justification for the clean label is that natural gas releases less carbon into the atmosphere per Btu of energy than other fossil fuels like coal and oil.
According to the U.S. Energy Information Administration, a million Btus of natural gas produces 117 pounds of CO2, compared to 200 pounds for coal and 160 pounds for oil distillates like diesel fuel.
But in terms of adding CO2 to the atmosphere, natural gas still has a "dirty" side, and its carbon impacts add up. Natural gas was Arizona's top energy source in 2019, and according to EIA data, Arizona released 25.6 million metric tons of carbon dioxide from natural gas into the atmosphere in 2019.
That much CO2 is equivalent to emissions from five million cars driven for one year.
If the carbon footprint of Mesa's city-owned utilities is factored into Mesa's overall carbon footprint, a substantial increase in natural gas delivery could counteract carbon reductions from climate action plan initiatives like fleet electrification and additions of solar to its electrical grid.
But Giles said ramping up gas delivery now is still in line with the city's
climate vision.
"As an advocate for the climate action plan, I don't see a disconnect with the natural gas expansion at all," Giles said. "Natural gas is a great interim use as technology over the next few decades will advance. Maybe a few decades from now natural gas will not be a big deal, but for the foreseeable future it will be."
Thompson also defended the growth of natural gas.
Thompson, the current chair of Mesa's Sustainability and Transportation Committee, worked for Southwest Gas, a regional natural gas supplier, for 16 years, including four years in corporate-government affairs for the company, before he was elected to Mesa City Council. He is one of three Republican candidates for two primary nominations for the Arizona Corporation Commission.
"I think natural gas as a whole is under attack right now, across the nation, across the world," he said, referring to moves by some U.S. cities in recent years to ban new natural gas hook ups in homes. "It's still to me, coming from that industry, it's still one of the cleanest uses that we have."
Thompson said during the Sustainability and Transportation committee meeting this month that he supports developing renewable energy in Mesa, but he has also positioned himself as a defender of natural gas in recent committee and council discussions.
The discussion about CMC steel and Mesa's increased demand for natural gas came just a few days before the city's sustainability department gave its annual budget presentation to council, which included an update on city climate plan progress.
Last year, Mesa's electricity came from 2% renewable sources. Mesa's Director of Environmental Management and Sustainability Scott Bouchie presented a plan to ramp up the city's percentage of renewables to 25% by 2025 and 50% by 2030.
In an interview after the presentation, Bouchie took a pragmatic approach to the city's growing use of natural gas.
"It's better than coal, but it's not the be-all, end-all solution," Bouchie said. "But it's a necessity. The way we live our lives and what we have for our energy demands, natural gas is a necessity right now."
"It is a (carbon) reduction today, that's available to scale today," he continued.
Natural gas mined from the earth is non-renewable, but methane can be captured from biological processes like foodwaste decomposition and wastewater treatment, and refined to a level where it can be added to natural gas pipelines. Methane produced this way is called renewable natural gas, or biogas.
Mesa is investing $5.5 million in a program next year to develop the capacity to refine captured methane from its wastewater treatment plants to a utility-grade product usable in its fleet of compressed natural gas garbage trucks.
The amount of methane the city's wastewater plant produces could provide up to 40% of the fuel used for its garbage collection fleet, Bouchie said.
While significant, that represents only a small fraction of the city's total natural gas use.
To meet its climate aspirations, the city is banking on being able to access larger volumes of renewable natural gas in the future.
A graph presented by Bouchie shows Mesa's use of biogas climbing to 23% by 2025 and 50% by 2030.
The plan suggests that Mesa is planning for a gas-powered future, but whether RNG will be available to the city in significant volumes is unclear.
McRae said that large volumes of RNG are not widely available on the market currently, and the availability of RNG is usually tied to a specific project, like a water treatment plant.
One possibility McRae cited for greening its natural gas utility is purchasing RNG credits from projects outside Mesa.
"There's a way of getting natural gas credits. We've also considered that over time as well," he said.
