One challenge is to improve security and reliability of supplies of fuels like gasoline, jet fuel, and natural gas into the state.  Many of us remember the hardships caused by the Kinder Morgan pipeline break in 2003.  That catastrophe halted delivery of gasoline from refineries in the Gulf Coast into the Phoenix area for several weeks, leaving only the pipeline delivering gasoline from California to meet Phoenix demands.  Prices spiked and drivers lined-up at gas stations reminiscent of the oil embargo days of the early 1970s.  More recently, power plant and rolling blackouts in Texas led to inadequate pressure in natural gas pipelines serving southern Arizona, leaving thousands of homes and businesses without heat or service during an exceptionally cold spell this past winter.  We can remedy the security of supply problem by adding new pipeline and storage capacity.  Kinder Morgan, for example, has already increased the capacity of its Eastern pipeline by replacing segments with larger capacity pipe.

At one time, plans were moving forward to build a refinery in Yuma which could relieve the pressure for delivery of refined fuels into the Phoenix area.  Crude oil supplying the refinery would be delivered via a pipeline through Mexico from a port on the Gulf of California.  While the project has obtained air permits for its proposed Yuma location, not much more has progressed in moving the project forward.  If built, the Yuma refinery would be the first U.S. refinery to come on line since 1976.

I’ve previously written (here) about the need for natural gas storage in Arizona.  We’re one of only a handful of states without substantial storage capacity.  Several proposals have surfaced for creating large underground salt caverns to store natural gas, but have yet to move beyond initial planning stages due to concerns raised by community groups, environmental groups and financing issues.  A local supply source of stored natural gas could alleviate outages from pipeline disruptions like the one experienced this past winter.

A second energy challenge is to ensure the safe and adequate delivery of electricity to meet our needs for power while reducing emissions of greenhouse gases.  This is especially challenging for a growing state like Arizona where the demand for electricity is projected to increase by 85 percent over the next 25 years.

We’re meeting this challenge through a combination of renewable energy sources and conservation.

All of Arizona’s electricity providers have added renewables, like solar and wind, to their portfolios and have plans to add much more in the future.  The ACC requires regulated power companies to obtain 15 percent of their energy from renewable sources by the year 2025.  The Salt River Project, which is not regulated by the ACC, is proposing that its “Sustainability Portfolio” reach 18 percent by 2020.  SRP counts hydro power and energy efficiency in its portfolio.

Over the next 10 years, Arizona’s regulated electric utilities will be required to implement the nation’s most aggressive energy efficiency mandates.  By the year 2020, these companies must achieve a 22 percent reduction in sales of electricity.  Meeting this aggressive target will require a combination of programs and incentives to induce customers to conserve energy by acquiring energy efficient appliances, retrofitting homes with weatherization protection, paying attention to price signals and changing lifestyles.  The state legislature and municipal governments can also assist in meeting these goals by passing building codes focused on meeting stringent efficiency standards.

Arguably the most controversial tool in the energy conservation tool box was reported today in the Arizona Republic.  APS is seeking volunteers for its Home Energy Information Pilot program, which will enable APS to control the thermostats of the volunteers, thus enabling APS to dial-back air conditioners to meet load conditions by lowering demand.  Controlling loads in this manner enables both APS and the customer to save money.  APS saves by avoiding adding costly resources to meet peak load demand and the customer saves by using less electricity, thus lowering the bill.

Although some might view this load controller program as Orwellian (see comments to my blog from 28Apr2010), it does provide customers with options to save on the power bill.  If the pilot proves successful for both volunteering customers and APS, full rollout of the program on an optional basis could benefit the full body of APS customers by lowering costs.
It’s clear there are several challenges we are facing as Arizonans.  It reminds me of a quote I read the other day:

“There are two ways of meeting difficulties: you alter the difficulties, or you alter yourself to meet them.”
– Phyllis Bottome, British Novelist

Folks, we have the tools and the talent to meet these challenges.  The question is: do we have the collective will to move forward?