Baja gas plan fuels Mexican protests
ROSARITO, Mexico (AP) – It’s the biggest thing to hit Rosarito since the invention of Spring Break: a proposed $400 million terminal to import natural gas and distribute it in the energy-hungry U.S.-Mexico border region. But this beach town 20 miles south of the border isn’t exactly welcoming what would be the largest private investment project in its history.
Instead, the plan to bring in natural gas from Southeast Asia is leading to boisterous street demonstrations and complaints about safety and the potential harm to tourism, the mainstay for this city of 100,000. It’s also contributing to concern that global energy companies want to use northern Mexico as a backdoor into the U.S.-energy market.
“We need the money. Mexico needs the money,” said Eduardo Orozco, who sells hand-crafted furniture to tourists at his shop on Rosarito’s dusty main street. “But because we need it doesn’t mean that you can come down here and do whatever you want.”
The Rosarito terminal is one of at least four natural gas terminals proposed by some of the world’s largest energy companies for the Baja California coast. Combined, the projects would transform the region into a major supplier of natural gas for power plants and industrial users in northern Mexico and California.
In the minds of many in Rosarito, the promise of dozens of permanent jobs and a flush of spending in the local economy hasn’t outweighed concerns about potential harm to the environment and the image of a town best known for the revelries of college students on Spring Break.
So far, there’s enough opposition that Rosarito’s mayor says he might block the land-use permit required to develop the natural gas terminal.
“I think it’s going to be very difficult to convince people this is a good project,” Mayor Luis Enrique Diaz said.
Phillips Petroleum Co. and El Paso Corp. already have spent millions buying land. Denial of the permit would be a costly setback, and could also spell trouble for three other natural gas terminals that foreign firms have proposed in the area.
Mexico’s Baja California state is attractive to energy companies because it suffers from chronic power shortages, has a growing industrial base and population, and can share surplus power with its neighbors across the border in California, which has power shortages of its own.
Liquefied natural gas, or LNG, is a solution to an energy dilemma. It is a cleaner, more efficient fuel than oil or coal. But vast natural gas deposits lie in remote areas, beyond the reach of pipelines.
To ship it, natural gas is cooled until it becomes liquid and then put in tankers. At terminals like those proposed for Rosarito, the LNG would be warmed with sea water before being piped out.
Rosarito residents say they believe company assurances that the technology is safe. But they worry about the terminal’s proximity to a government-owned power plant and a fuel oil storage facility operated by Pemex, Mexico’s state-owned oil company.
Pemex has a well-documented history of environmental and safety violations and some fear the three facilities together would be a combustible combination.
“I don’t have any confidence in the government and it’s ability to enforce safety standards,” said Victor Sanchez, a Rosarito high school teacher.
And people living near the site oppose any further industrialization in the two adjacent, largely working-class neighborhoods.
“They shouldn’t put it in the middle of a neighborhood,” said Edubijez Medina, a mother of nine. “It’s too much risk.”
Phillips and El Paso Corp. have met with local officials and community groups to sell the concept. They downplay opposition, insisting support will be won over in time to start construction later this year and open the terminal in 2005.
“It’s a question of making sure our neighbors and the local officials are comfortable with the safety and the economic benefits of the project,” said Ricardo Reyes, director of external affairs for the Mexican subsidiary of Phillips, based in Bartlesville, Okla.
Mexico has no LNG receiving stations. Federal regulations to authorize the terminals are expected later this year. Presently, no LNG facilities serve the U.S. West Coast: The four in the United States are in Maryland, Massachusetts, Louisiana and Georgia.
Baja California is seeing a rush of energy development. Two power plants are under construction near the border town of Mexicali, as is a 215-mile natural gas pipeline between Blythe, Calif., and Tijuana.
Other U.S. firms are following the progress of the Rosarito LNG project.
Marathon Oil of Houston and Pertamina, Indonesia’s state oil company, are part of a consortium proposing a $900 million project for Tijuana that includes a liquid natural gas terminal and a 400-megawatt power plant.
Two LNG projects are proposed for the port city of Ensenada, 70 miles south of the border: one by a unit of the Royal Dutch Shell Group; another is a partnership by San Diego’s Sempra Energy and CMS Energy Corp. of Dearborn, Mich.
ChevronTexaco Corp. is also considering a liquid natural gas terminal in Baja California.
Analysts doubt there’s enough demand to support all the proposals. “I think more than one would be too much,” said Alan Sweedler, director of the Center for Energy Studies at San Diego State University.
The projects also must overcome mounting opposition from Mexican and U.S. environmental groups.
The Rosarito project is drawing the most vocal and organized protests. Last month, teachers and parents pulled children from two elementary schools to present 1,000 protest letters to Rosarito’s mayor and Baja California Gov. Eugenio Elorduy.
The project has yet to win the backing of the city’s most prominent association of business leaders, which is awaiting results of a risk assessment, said Hugo Torres, the group’s president.
“Clearly, there are benefits,” said Torres, owner of the Rosarito Beach Hotel. “But there aren’t so many that they could overcome any risk. We’ll just have to see.”
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