Interview with Dory Peters of Big Navajo Energy & Bill McCabe of McCabe & Associates
Did you know Navajo Nation households make up 75% of all unelectrified households in the U.S.? I discussed a recent hydrogen project Dory Peters of Big Navajo Energy & William McCabe of Navajo Nation Oil and Gas Company have undertaken with Siemens & Power Innovations International Inc to address this issue. We also spoke about Dory’s work to provide distributed solar & wind systems to local Navajo homes to prevent families living within a half mile of nearest power line from paying upwards of $60,000 per mile to connect to the grid.
Governments have been fairly supportive of several types of hydrogen so far, including blue hydrogen. What role do you think hydrogen plays in a fully decarbonized, electrified future for all?
Catherine: Hi, I’m Catherine McLean, Founder and CEO of Dylan Green. And today I have with me Dory Peters. Dory is the present CEO of Big Navajo Energy. And I have with me, Bill McCabe. Bill is the Vice-President of Navajo Nation Oil and Gas. Thanks for joining me, gentlemen. So I’ll start with you Dory. Can you tell us a little bit about yourself and your journey into clean energy?
Dory: Yeah, Big Navajo Energy’s been around for, we’re working on our 10th year in business. And I’m originally from a small little town called Red Valley, Arizona, right smack dab in the middle of the reservation. I’ve always had a passion for helping my people and being able to provide energy, electrification and other aspects of clean energy and renewable energy, whether it be solar wind or any aspects of that environment that I’ve always been cautious of, being raised by my grandfather, who was a medicine man as well. So being in harmony and being a part of the environment is really true and dear to my heart. So I’ve tried to instill that into Big Navajo Energy. And so here we are 10 years going,
Catherine: Well, congratulations. Are you going to have a party, on your anniversary?
Dory: Yeah, it’s really been quite a journey, but it’s been a very interesting journey. I’m happy about what we have done over the last few years or so, and continue to do. So we’re very happy about that.
Catherine: And Bill?
Bill: Thank you. Good morning. Yes. I am an enrolled member of the Navajo Nation. I’ve been in the energy business for my entire career over 40 years. I am a petroleum engineer by education and originally started my career in the oil and gas industry. I was involved with drilling and exploration and production for the beginning of my career and had an opportunity to work with an organization called the Council of Energy Resource Tribes. That was a consortium of 53 tribes with some type of energy within their land base. And it was there I was exposed to the, I call it, the Tribal Energy Arena. I’ve been working with tribes and tribal energy and tribal energy development ever since. So for about 25 years, partially as a consultant, partially as a member of a corporation and currently with Navajo Nation Oil and Gas Company, as Vice President of their downstream operation. I’ve worked with many tribes over the years with regard to energy and provided a consultation as to the development of the resources. And realize that this is a staple for economic development for many tribes. So, it’s become my passion and my profession. So I’ll leave it at that. You can talk more about it. Thank you.
Catherine: Thanks. I want to start with talking about environmental justice. So I got some stats from my incredible marketing manager, I’m always raving about, Lisa DeMarco. And I was really, really shocked, unelectrified Navajo households represent 75% of all unelectrified households in the US and almost 30% of Navajo homes do not have electricity. Why do you think this is? And do you think this issue is being sufficiently addressed?
Dory: You have a, I guess, a perfect storm of things going wrong. You have a layered government, not only just Navajo Nation, but you have federal government, you have a state government, and then you have local government all pancaked into a certain segment of the Nation. And so the challenge has been, how do you — we’re well aware of the problem and we understand the problem. One thing is that a lot of our folks on the Navajo Nation are rural and so they don’t like to live in subdivisions. And so basically utilities really drive the narrative of how you live outside of the Nation. Like in an urban setting, you have everything from water, electric hookups and so forth. And on the Nation, you don’t have that.
So the challenge is how do you get a line out to a particular family that is not adjacent to any other type of home that will actually have that electric power or water access? So you have a segment of the population, which is in the thousands that live, like we have lived over, you know, hundreds, if not thousands of years. And the amount of power, of energy, that it takes to hook up one particular house, the math doesn’t work out. So you have a problem of where do you– and then on top of that, you have a limited income of folks that live in those areas that don’t have the resources or the money to pay their monthly bills in that regular fashion of utility bills and so forth. So what I’ve done is, to answer your question, it’s a challenge, yes. But at the same token, if you look at it and peel back, with the problem that we have, we find that renewable energy, solar wind, and providing that access to a particular home is relatively available. And so we’ve been doing that over the last few years, and I wish there was more people like myself that would actually go out and do the same thing that I’ve been doing. And there’s probably, I would say less than 10 other companies that do what I do, but we have a issue where it’s thousands of folks that have that same challenge of not having access to basic electricity, water, plain water, and just,you know, how do we meet those challenges? So again, it’s not that we don’t know what the problem is. It’s just how do we address that problem going forward?
And so I think the answer is to provide a portable generator powered by solar powered, by wind or even both provides access to lighting and access to water pumps and so forth. So I think that there’s definitely an issue that we have at hand, but at the same token, we feel that some answers are out there and we’re not doing it fast enough is really what the problem is.
Bill: To compound matters, the Navajo Nation expands across 17 million acres, 160 miles east to west 130 miles north to south, crossing three states, Utah, Arizona, and New Mexico. So with regard to traditional utility service, and utilities being state regulated utilities, that becomes an issue. As Dory mentioned, our homes are very far apart.
So when you talk about running a line to grandma’s house off, off a main line, if it that mainline even exists within the Reservation, you’re talking $50,000 to $100,000, maybe even $200,000 to run a single line to a single residence where the monthly utility bill is $200, maybe. And as Dory said, you do the math that just never pays out. So the cost to electrify Navajo Nation is immense. And our current tribal utility, the Navajo Tribal Utility Authority has been in existence for over 60 years as a result of these issues, interstate issues, the expansive land, and has done an amazing job to date, trying to capture, and electrify and provide utility services to homes throughout the Reservation. But those numbers are astounding. Those statistics that you mentioned are astounding considering at one time we had seven coal-fired generating stations, electric power generating stations on, or adjacent to the reservation, providing 7,000 megawatts of power continuously to cities like Phoenix and Tucson and Las Vegas, and Los Angeles improving the quality of life of those folks.
While, as you mentioned, we remain unelectrified. And in a past tense with regard to how we live, the quality of life, the access to facilities, TVs, electronics, and then that doesn’t end with electricity. It’s also running water and natural gas. The Navajo Nation is engaged continuously on providing for their community. Folks like Dory have been doing it on a one by one basis. Navajo Nation Oil and Gas does it on a larger basis with providing revenues to the tribes such that they can provide for the people.
Catherine: Okay. Well, thank you so much for shedding some light on that for everyone, who’s going to be listening to this. What are some key initiatives that need to take place to overcome these challenges?
Dory: One of the biggest efforts that our nation’s government has addressed in this new round of funding that we’ve have seen, last year and this year, that the federal government’s coming in to provide the funding, whether it be broadband infrastructure, as part of those funds that are going to be allocated will address those needs of electrification for our citizens or tribal members going forward. So, and I think this is a, probably a decades long program that will happen, being that you’re talking thousands of families that need help. One of the things that we look forward to is really providing a solution. I would say in my side of the fence, it’s more green driven. And I see that as a solution for folks that money, the funds, that are coming down the pipeline will address some of those elderly, our elderly need water. They need clean water. They need electricity. And also our veterans that we also have targeted as being the most vulnerable of our population, our elders, and our veterans and folks with a disability as well, with diabetes, they have the C-PAP machines, and so forth. We need to have continual power to provide that to our elderly and our tribal citizens as a whole. And so the Nation in itself is seeing those challenges and also those problems. And I think they’ve taken the right approach to address those. And so it’s slow. I wish it would happen sooner, of course, but I see that as a good solution going forward, more so than I’ve ever seen in the last 10 years.
Catherine: Oh, that’s wonderful news.
Bill: And the cost to do so is in the billions, not just one or 2 billion, but perhaps two or three times that amount, just for the electrification of the Navajo Nation. And again, as I mentioned, that doesn’t include water distribution or natural gas as well. Many of our homes, the majority of our homes, unless you’re in a larger city within the Nation, the majority of the homes are on propane. So you have elders and young children, families having to drive many miles to refill propane tanks, just for heating and cooking, sanitation. So, it’s a logistics problem, and it’s a cost issue to finally bring this up to standard. What we enjoy every day and take for granted.
Catherine: Yeah. Oh, definitely take for granted that’s for sure. I want to talk about this hydrogen project that you all have been involved with with Siemens. I’m very excited to talk about hydrogen, cause there’s a lot of talk about it, but I get to speak to people a lot about actual projects that are happening. So tell me a little bit about Big Navajo Energy’s partnership with Siemens Power Innervation and Navajo Nation Oil and Gas on the hydrogen projects.
Dory: Oh, I’d love to speak into that. It’s been an effort on our part for the last three years, and in the last two years with the Navajo Nation Oil and Gas, our partner. And one of the things that we engaged in is with Siemens is to use our turbines as we fill those needs of a hydrogen production. And also hydrogen energy electrification, and so forth to feed some into our power grids. So Siemens saw that years ago. So we had partnered with them as well. They’ve been a big advocate of our process of hydrogen development and Power Innovations is a fuel cell, which in turn now has turned into Renewable Innovations, which they have provided some of the fuel cells that we plan to use on our site. So let me back up a little bit.
We met with Bill about two years ago, going on almost three years this year, looking at how do we produce hydrogen? And one of the things that I saw way back then a few years ago was let’s capture that flared or stranded gas. And we saw that if we could capture the flared gas or stranded gas, we could actually create the hydrogen through a process called SMR as the methane reformer and extract the hydrogen out of it. But also in the same process, there is also a CO2 that comes off that same process as a by-product of the SMR, you know, life cycle, so forth during a production. And so we felt that we could actually utilize that from a gray hydrogen production to a blue hydrogen production, where we could actually capture the CO2 gas and feed that into a greenhouse and create the vegetables and vegetation off that same gas stream, and also provide a solution for electrification of fuel cell use and also the transportation of the hydrogen going forward.
And so it really provided a new tax base for the Nation. It also created jobs for the Nation. And also a new technology. And we feel that we are going to be leading that effort in the hydrogen space. And Navajo Nation is really a key and integral part of this whole process within the four corners region. And we saw that as a really big win-win for the Nation and also grow job creation and also being a part of a new, I guess, a hydrogen revolution. Our process of how we can produce a large quantity of hydrogen daily production and also feed into the new economy where we see there is a shift in cleaner energy. And so I’m really happy and been very pleased with the support from the Nation. And also there are leaders on the Nation as well.
And also a big part is Bill. He has been key in this whole thing and moving that narrative to push that where we’re at today. We will be producing hydrogen, probably the first quarter of this next year of 2022. And so we feel that we’re the first and we want to be in that leading that effort as we go forward. And so I’m very excited. It’s been a long process where the very last, I would say the last mile, which has always been both challenging, but also exciting at the same time.
Catherine: Yeah, yeah, exactly! Bill, what would you like to add to that?
Bill: Navajo Nation Oil and Gas company has a number of leases on the reservation. And many of those leases produce natural gas. And in, in many instances, because of the location, the remote location of these operations, we have the infrastructure to carry the gas off location. It does not exist. So a lot of this gas is stranded and in some cases we actually flare it the volume that we’re allowed to flare certain volumes within state and tribal regulations, but we’d rather capture that value. But again, given the fact that there is no access to pipelines we flare, or in some cases, the gas is shut in. We were approached by Big Naval Energy, as Dory mentioned, three years ago, looking for a supply of natural gas. I said, well, what’s the issue here? And as we talked more and more, we realized that there was a natural connection between his technology that he brought to the table, and the fact that we had a feedstock gas, natural gas for the project.
So we selected an ideal site at one of our natural gas producing locations, located in the state of New Mexico. As I mentioned, where the tribe is located in Utah, Arizona, and New Mexico. And one of our operations exists in New Mexico, within the confines of the Navajo agricultural products industries, or our farm. And so once we start producing hydrogen, capturing this natural gas, which has a very low commodity value as a natural gas, but when converted to hydrogen multiplies significantly. So not only are we creating new revenue sources for the Nation, royalties for the Nation, and income for the company as well, but also we’re increasing that value. Ultimately the CO2 that is produced in the processing of hydrogen will be routed to a project that the farm, the greenhouse project that the farm has slated.
So ultimately we’ll have a closed loop system here. So again, capturing a stranded asset, creating additional value, providing jobs and employment, and then ultimately benefiting the Navajo Nation with their resources, which are fairly generous. So this is a pilot project. The Navajo Nation has significant natural gas resources still in the ground as a resource, if hydrogen as a fuel of the future does become that, in fact, the Navajo Nation is set to be a large participant. Particularly on the San Juan basin in four corners region, to be a hydrogen producer and consumer. Our downstream operation is Navajo Nation Oil and Gas company, upstream exploration, production, midstream pipeline, and downstream is our C-store operations. Our retail gas stations. We ultimately would like to have hydrogen dispensers for fuels for fuel cell vehicles, to accommodate those vehicles along with electric charging stations, as we develop and expand our C-store operations. So all in all it’s, it’s a grand project, we’re just a little for such small scope, but we hope to introduce the tribe to the technology and then bring them into the future as, as we’ve always existed as an energy tribe, the Navajo Nation.
Catherine: That’s great. I’m excited! You can sell your consultancy services with everything that you’ve learned, right? I’ll broker the deal. Don’t worry. So the last question I have is around solar and wind. So you’ve said that individual Navajo families living within a half mile from the nearest power line can expect to pay upwards of $60,000 per mile for a traditional transmission line hookup to the main grid. Tell me about your work, delivering solar and wind systems to these households and the impact it’s had. I’m specifically interested as well in the impact it’s had during COVID.
Dory: So there’s been a lot of a transitional change and the solar and wind has been a part of the Nation for the last 10 to 15 years. What I mean by that is that we’ve had other developers come to the Nation with their technology and proven to be helpful, but also there’s a generation shift of having a lot of these systems not work anymore. So they become a thousand pound paperweight at people’s homes and they just lay there. And so what we, when I’ve seen this and traveled throughout the nation and these rural parts of homes that we have seen during the last year or the year previous, of course, we did a lot of work. And we found that the funding we got was from BLM USDA, and also from the Nation as well. And this is prior to COVID.
We felt that the prices of solar and wind had gone down, the technologies and through. And we’ve found that most people use around, I would say about 2000 KWH, kilowatts of power a day, where I think in a normal household, we’re about 4,000 KWH as a regular home. So we use less, however, in some areas they use a little bit more because they pump water and use it for a lot of their pumping of other resources. And also, they might have a washer dryer if they have water access, but they might not have the electricity providing the power to it. And so we felt that that has been helpful as we go forward. But during COVID, we were not allowed to go on to some of these places because they have lockdowns throughout the year. The one thing that they did have is access to propane. And I’ll have a Bill speaking to that in a minute here, but what we found that during the COVID process of last year, of course it’s still going on right now, is that we found that a lot of folks, it really kind of eroded to the level of, “Hey, we don’t have-”, just the procedures of COVID is wash your hands. Outside of the reservation, that just makes sense. On the reservation, it doesn’t make sense because you don’t have access to water, how do you wash your hands if you don’t have water? How do you keep your household clean if you don’t have access to any clean water? And then also stay inside, but what do you do when you stay inside?
You don’t have access to power or anything. So you’re basically almost living in a condition that is not favorable to anybody, let alone to the tribal members that have to stay in their communities and not move around. So what COVID provided was that we need to address this right now. It’s not a situation where we have to wait five years or 10 years. It has to be addressed now. So now it’s been exciting for us to see that the funding is coming down the line. And I wish there would be more people like myself that would provide, because if there were a hundred different companies that were native owned, or Navajo owned that were in that same space that I’m in, I think we could address that quicker, but there’s only a handful of us. I’ve done maybe 250, or the company’s done 250+ installations over the last 10 years, which is really nothing. But it’s a big impact for the people that we’ve been helping over the last few years.
Hopefully I answered your question, but I think as COVID, continually, it’s a part of our livelihood, unfortunately. But on the Nation, you have problems with broadband and people. Just my family, I just spoke with them this morning and they said they want to go back to school. The kids want to go back to school, but they can’t go back to school, cause there’s still that mandate of, we want to say at home, but now they’re giving out laptops to study at home. And so my nephews and nieces are saying, I want to see my friends, but they can’t see their friends because they can’t go to school. And, but then that same token, the mom has to go to work. And so who takes care of grandma or the grandparents have to take care of them? They’re not tech savvy, if you will. So the fact that there’s an ongoing, it’s always something. But I think overall, I think that we have solutions. And so those solutions, some will probably meet the problem right now. And it really is a question of how quick can we move this year and the next year as well. So, all in all during COVID Navajo Oil and Gas was a tremendous help to, I would say, thousands of families. I’ll have Bill speak into what they did last year during COVID.
Bill: Historically the Navajo Nation has relied on revenues from energy resource extraction, primarily coal. We have an abundance of coal. My understanding is that we still have a hundred years, if not 200 years, of coal still in the ground, that can be mined. We have a very large oil field, a billion and a half barrel oil field, of which approximately one third of that oil has been produced to date. So significant reserves are still remaining. But as the tribe and society has moved forward into a more clear picture about energy resource and the consequences of energy resource, not only development, but consumption, they started looking at renewables and as it turns out, Navajo Nation has significant wind resources. World-class wind resources. As a matter of fact, they have significant solar resources. Sitting at the elevation that the Nation does that at 6,000 to 7,000 feet, maybe even higher. In some locations you have solar intensity. That’s second to none in some cases. So the existence of Navajo as an energy tribe still remains.
It’s just, how do we move into the future now? Coal is fast falling out of favor as a fuel. Oil and gas still remains, we’re still dependent on oil and gas will continue to provide that. And again, it’s a revenue source, but how do we look at solar? How do we look at wind? And then alternative fuels, how do we look at hydrogen? How do we convert natural gas into, into power? How do we look at what the natural gas sets in the ground? How do we look at that? And, even coal, the technology to convert coal to natural gas and even synthetic fuels exists. So Navajo has a strong future ahead of us. It’s just, how do we want to develop this? How do we conform, if you will, tribes have a hard time conforming, I might get gold for that one. But how do we fit into the energy picture for not only ourselves, but the United States and the world as well. That’s the question that remains right now.
Catherine: Yeah. Well, thank you so much for your time and telling us about all the wonderful work that you’re doing. I think it’s fantastic. And, thanks again for joining me today.
Bill: You bet, Catherine. Thank you.
Dory: Hey, thank you so much. I appreciate it.