Roast Hatch Chile Peppers (Skip Ahead if They're Already Roasted)
To Roast on a Gas Burner. Place cleaned, whole peppers directly on the grates of a gas burner that's turned on medium-high heat. Use tongs to turn the peppers until they are blackened on all sides.
To Roast Under the Broiler in the Oven. Turn on the broiler in the oven to high. Place clean, whole Hatch chiles in a single layer on a baking sheet. Set sheet under the broiler until skins blister and blacken, about 5 minutes. Turn the peppers over and broil for another 5 minutes.
Place hot roasted peppers in a heat-proof bowl. Cover the bowl with a lid or large plate and allow peppers to steam for about 15 minutes.
Once steamed and cool enough to handle, peel the thin, blackened skins off the Hatch peppers. Then split the peppers along one side to open them up, and scrape out the seeds. HIGHLY recommend wearing gloves to protect your hands.
Make Hatch Green Chile Pepper Sauce
Place all the ingredients in a food processor or high-power blender and process until smooth, occasionally stopping the machine to scrape down the sides. Add more water 1 tablespoon at a time to get a smooth, pourable consistency, similar to ketchup.