Baja Energy and Environment Update

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Power companies confront power of the people.
Baja Energy and Environment Update
by Jonathan Treat | May
2, 2002
Several large power companies looking to profit from the growing demand for
energy in California and northwest Mexico are vying to build natural gas facilities
and electric plants in Baja California. But many of their proposed projects are
facing stiff opposition from environmentalists, community activists and local
governments. The dissidents argue that the gas and electricity installations pose
serious threats to natural and urban environments and to the quality of life in
the Mexican border state.
At least five major energy firms are planning liquefied natural gas (LNG) terminals
in the state. San Diego, Calif.-based Sempra Energy International, the Phillips
Petroleum and El Paso Corp., Royal Dutch/Shell, ChevronTexaco, and Houston, Texas-based
Marathon Oil Co. are competing for sites to build LNG plants in Baja California.
Interest in LNG has grown dramatically in recent years. At least in comparison
to other fossil fuels, LNG is relatively clean. Plus it can easily be shipped
in tankers and stored at terminals in fuel-hungry areas that lack other developed
energy supply lines.
Baja California is a seductive spot for siting the multimillion-dollar LNG
facilities. Last year’s energy crunch in California rendered both the Pacific
U.S. state and northern Mexico vulnerable to skyrocketing power prices, and Baja’s
location could offer a strategic advantage for LNG distribution centers and would
reduce dependence on more costly oil, say proponents. Critics add that the availability
of new supplies of U.S. and Mexican natural gas in the area would also propagate
California’s conspicuous consumption of energy and feed the frenzied, unsustainable
growth of Mexico’s border states.
What’s more, they note, building facilities in Mexico affords international
power companies opportunities not found in California, such as lax environmental
regulations and enforcement, a speedy permitting process, and cheap labor.
Despite the concerns being aired by citizens groups, authorities on both sides
of the border are enthusiastic about the proposed energy projects in Baja California.
Mexican President Vicente Fox plugs the LNG plants as a way to meet the country’s
increasing energy needs and a source of income from foreign investment.
California Gov. Gray Davis, during a news conference in Mexico City in December,
touted U.S. private investment of more than a billion dollars in developing LNG
pipelines and power plants in Mexico. He expressed hopes for more contracts in
Mexico to meet California’s insatiable energy demand.
The Baja cities of Tijuana, Rosarito Beach and Ensenada offer choice properties
for LNG terminals and infrastructure. The deep water off many coastal sites would
allow tankers to arrive and unload right into storage tanks. Geological stability
and plenty of space for terminals, storage tanks, even generating plants at some
locations, are additional attractions.
Take Phillips Petroleum and El Paso Corp.’s parcels at Rosarito Beach, which
is at the center of the energy development maelstrom. In purchasing the property,
the company considered it was acquiring the state’s premier LNG site in terms
of logistics, geological characteristics and coastal access.
The place is not, however, the best site in terms of popular support for the
project. The city of Rosarito is home to one of Baja California’s most activist
populations, and many residents are dead-set against building a LNG terminal there.
They argue that it threatens tourism in the area, and that it puts the community
in danger of a disastrous explosion.
Though LNG installations have a fairly good safety record, the proximity to
the project site of other power facilities make it a risky venture, adding to
existing environmental dangers from the energy sector. Adjacent oil and gas tanks
belonging to Petróleos Mexicanos (Pemex) are 40 years old and leaking.
A network of 69,000 power lines crisscrosses the site. A natural gas pipeline
runs underneath it. And the nearby Presidente Juárez power plant was recently
cited for felony environmental violations.
Upwards of 12 different community activist groups are fighting against the
“A lot of people are mad,” said Rosarito Beach Mayor Luis Enrique
Diaz, who shares the concern over the safety of the proposed LNG facilities. (Proposed
Plants Fuel Passions, Diane Lindquist, San Diego Union Tribune , March 4,
Diaz also is worried about the effects of the LNG plant and its imposing storage
tanks on the tourism industry in this resort town.
Meanwhile, near the city of Ensenada, Sempra Energy International faces a different
sort of challenge to its plans to put a LNG site on a pristine plateau overlooking
the Pacific Ocean. Environmentalists and conservationists, instead of trying to
block the plant’s construction, are pressuring Sempra to buy up to 1,000 acres
around the site and preserve some of the coastline in its natural state.
In Tijuana, Marathon Oil has secured a site in Playas de Tijuana, on the waterfront
about 15 miles south of the U.S.-Mexico border. The company wants to build an
LNG terminal, regasification plant, storage facilities, a pipeline to U.S. and
Mexican markets, and a 400-megawatt electric power plant there.
The proposed project is strongly opposed by many residents. The site is in
the midst of a highly populated residential area, and is a favorite weekend getaway
spot for Tijuana locals and U.S. tourists.
None of the LNG construction plans in Baja California can move forward without
the pending approval of the Mexican federal government. And the municipal governments
of Tijuana, Ensenada, and Rosarito Beach have the final say on zoning and building
permits for the proposed projects.
In effort to make the projects more palatable to local residents and governments,
the international power companies are touting the benefits of abundant and relatively
clean energy, job opportunities, and the chance for increased growth and development
in the affected communities.
Some are offering to build infrastructure projects. Marathon has offered to
build a wastewater treatment facility and a water desalination plant in Tijuana
to sweeten the deal for its proposed LNG complex.
Phillips executive Ricardo Reyes said that if the company’s Rosarito Beach
project is approved, the firm would even paint the LNG storage tanks like works
of art.
“We think the storage tanks will be part of the attraction,” he said.
(“Proposed Plants Fuel Passions,” Diane Lindquist, San Diego Union
Tribune , March 4, 2002)
Whether enough Baja California residents can be convinced, cajoled or swayed
into allowing the construction of the many LNG projects being planned along the
coast of their state remains to be seen.
The many international power companies, along with Mexico’s federal government,
are watching warily to see if their big energy plans for Baja will be able to
move forward.
Jonathan Treat, a journalist and independent documentary filmmaker with
extensive experience in Mexico and Central America, writes regularly for the IRC’s
Americas Program. Based in Oaxaca, Mexico, Treat also coordinates educational
study tours and volunteer opportunities in the region for U.S. students.

Bill Powers | Border Power
Plant Working Group
Tel: (619) 295-2072

Sue Over Transmission Lines From Mexico To US” | Yahoo News, March 19, 2002
“Proposed Plants Fuel
Passions” | San Diego Union Tribune , March 4, 2002
“Drilling Strikes at
Mexico’s Heart” | Washington Post , Jan. 25, 2002
“North American Power
Needs Bring Environmental Challenges” | Environmental News Network ,
Nov. 29, 2001
“Powering up the Border:
What’s the Rush?” | Americas Program Commentary, Sept. 5, 2001
“Energy Firms Get a
Foothold in Mexico” | Los Angeles Times , August 19, 2001.
“New Border Plants
Will Take Toll on Air Quality” | San Diego Union Tribune , June 27,
“Cross-border Energy
Connections” | borderlines vol. 9 no. 4, April 2001
Published by the Americas
Program at the Interhemispheric Resource Center (IRC). ©2002. All
rights reserved.

Recommended citation:
Jonathan Treat, ” Baja Energy and Environment Update,” Americas Program
Investigative Article (Silver City, NM: Interhemispheric Resource Center, May
2, 2002).
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