Ascension considers getting into gas and water business

Ascension Parish government officials, already trying to pull together the early pieces of a parishwide sewer system, also have been investigating the possibility of getting into the natural gas and water business.

Parish President Tommy Martinez has been meeting with an economic development consultant for several months about buying natural gas from pipelines running through the parish and selling it at a profit to industrial users along the Mississippi River.

In March, the Parish Council also authorized Martinez to sign an exploratory agreement with a startup venture firm wanting to tap unused saline aquifers under the parish. Backers envision an electrical cogeneration and water distillation plant that would create fresh potable and industrial-grade water with excess power sold back to the grid.

Officials with the Dallas, Ga.-based startup Water and Power Cogen Development LLC said they would recirculate any saline water not converted into freshwater back into the aquifer from which it came. The process would be powered by natural gas turbines.

They say their patented process, based on existing technology, could be one solution to concerns about saltwater intrusion in the area’s overburdened freshwater aquifers.

“It appears to be a win-win for the parish and residents. It takes the burden off the freshwater aquifer and provides opportunities for new industry in Ascension,” Jerry St. Germain, chief executive officer of Water and Power Cogen, said in an interview this week.

With an eye toward these possibilities, the Parish Council gave initial backing on Thursday to an industrial incentive agreement that would call on Methanex to consider buying water and gas from the parish as part of a deal to gain an estimated $450,000 in sales tax rebates.

Vancouver-based Methanex has plans to relocate a second 1 million-ton, $550 million methanol plant from Chile to Geismar.

The Parish Council agreed last year to rebate its 1-cent sales tax on construction materials and equipment for the first plant, a rebate worth an estimated $1.61 million.

A final council vote on the incentive agreement for the second plant is still pending, for which the council is offering a rebate of 0.45 cents.

“If we’re going to give all this up, we ought to get something back,” Martinez said in an interview earlier this week.

Martinez said he is excited about the opportunity presented by Water and Power Cogen and is interested in giving it a shot, though the project could be more than two years away.

“I think it’s just a good thing and, hopefully, we can be the first. We can lead and show that it works,” Martinez said.

Since the March agreement with the parish, Water and Power Cogen is in its due diligence stage, scouting sites and preparing to test the aquifer, company officials said.

Under the parish agreement, Water and Power Cogen would come back to the council after this period and seek a 20-year water purchase deal.

The company would cover all upfront costs for its production facility, which would be the company’s first, though company officials say they are courting offers in other states, too.

While a parish utilities district supplies some customers in rural Darrow and Geismar, water service on much of the east bank outside the city of Gonzales is largely dominated by a Baton Rouge Water Co. subsidiary.

Johnny Taylor, vice president of Water and Power Cogen, told a council committee earlier this year that the company’s process could produce water at a discount to current residential prices of $5.86 per 1,000 gallons.

“Our process, we produce water better than half of that cost,” said Taylor, an Ascension Parish native and a childhood friend of Martinez.

But Tom Pankratz, an independent desalination consultant based in Houston and editor of the weekly Water Desalination Report, said most countries are moving away from the primary desalination technology Water and Power Cogen is proposing: multi-stage flash distillation.

The process essentially boils off freshwater from saltier water passed through a series of chambers with decreasing air pressure. The decreased pressure lowers the boiling point of water.

Pankratz said the method has been replaced with filtration systems because the other method is the most expensive and energy-intensive form of desalination.

“I’m highly skeptical that a company that has never designed, built or operated such a system could do so in a cost-effective and environmentally sustainable manner,” he said in an email.

Taylor and St. Germain, meanwhile, have asserted they have decades of experience in power generation and their team has more than 250 years of experience overall.

Steven Nosacka, who works as an economic development consultant for St. James Parish and has his own financial advisory company, said Ascension, as other cities and parishes have done, can take advantage of large prepaid natural gas transactions to buy gas.

The bonds funding the purchases can sometimes be tax free and set up long-term gas purchases at a discount, he said.

“It gives an opportunity for industry to get a natural gas supply, some portion of their natural gas supply, at a discount compared to other sources, and at the same time, it allows the parish to enjoy some revenue from those natural gas source sales,” Nosacka said.

Nosacka, who said his company would have an interest in facilitating such a transaction, said discussions with the parish are in their early stages.