Posted on 11/11/2002 4:54:12 AM PST by snopercod
PLAYAS DE ROSARITO, Mexico -- The surveyors working across the street from her humble home piqued Guadalupe Concha's curiosity, so the bilingual secretary asked what they were doing.
She expected to be told more homes were being built on the enormous lot, as the owners of the land had told her when she bought her property for $20,000 from them nearly five years ago.
Instead, she discovered Houston-based companies El Paso Corp. and ConocoPhillips planned to build a liquefied natural gas, or LNG, receiving terminal here.
It's one of at least five such terminals being planned within less than 50 miles of one another, all part of a drive to find alternatives to a shrinking supply of natural gas.
In addition to the consortium of El Paso Corp. and ConocoPhillips, Houston-based Marathon Oil Co., San Diego-based Sempra Energy, San Francisco-based ChevronTexaco Corp., and Shell Gas & Power all plan to build terminals worth hundreds of millions of dollars in the Mexican state of Baja California.
These companies plan to buy natural gas from Australia or Asian and South American countries, chill it into a liquid form and ship it in tankers to the proposed receiving terminals in Mexico. The terminals will regasify the fuel and send it via pipelines to customers either in the United States or Mexico.
People in this town know Mexico needs such alternative sources of fuel to keep up with its population and frenzied industrial growth and to pay cheaper prices than they do now.
But the news that a terminal would be built in her front yard filled Concha with fear because adjacent to the proposed site is a government power plant and Petroleos de Mexico, or Pemex, oil and gas tanks, both of which are covered in rust and peeling paint.
"We're scared enough with this here," said Concha, 42, pointing to the Pemex tanks and Presidente Juarez power plant. Concha and many of her neighbors have tried to sell their homes with no luck.
"Who wants it," Concha said of her three-bedroom home worth about $130,000.
The fear that a leak at the gas terminal could trigger a massive explosion or similar disaster at the Pemex plant has led some of the 64,000 residents of this beachside town to fight the energy giants' plans.
Up and down the coast of Baja, many Mexicans are organizing to oppose construction of similar gas terminals in their communities.
Energy companies assure residents that natural gas is a clean-burning fuel and that no risk of explosion exists.
But an explosion isn't the only concern of residents, who fear a giant gas terminal at the entrance to their town will drive away tourism, the lifeblood of Rosarito, as it is commonly called.
Until recently, this was a sleepy seaside town where Americans and Tijuana residents came to surf, eat lobster or buy handmade furniture. A few years ago, it gained international fame when the movie Titanic was filmed just a few miles south.
"If tourism goes down, the whole town would go down," said Eduardo Orozco, a furniture maker who is leading the fight against the El Paso/
ConocoPhillips project.
Officials from El Paso/ConocoPhillips declined an interview request but did distribute to local residents a comic-book-style pamphlet to assure neighbors the terminal would be safe and would provide jobs for locals.
"People will read a comic book. They will not read literature," said Orozco, 64, recognizing El Paso/ConocoPhillips' strategy.
Orozco knows he is fighting powerful foes: energy companies and their potential profits, economic growth plans of the Mexican government and California's attempt to solve its energy woes.
The Mexican government wants gas-receiving stations because the state of Baja California receives natural gas via pipeline from Texas, California and other U.S. states.
"Mexico in this particular region has always been dependent on the U.S. for gas supplies," said Darcel Hulse, president of Sempra Energy International. "It's not interconnected with mainland Mexico. It is interconnected with the U.S."
Shell officials wrote in an e-mail that the gas produced at its plant near Ensenada would be cheaper than gas Mexico imports from California and it would make the Baja area independent of California's energy market.
Not only would Baja California no longer be reliant on the United States for natural gas, it could use the additional infrastructure as a selling point when trying to attract businesses to build maquiladoras.
The gas terminals, combined with plans to build power stations in Baja, would mean the state would have more than enough energy, said Sergio Tagliapietra, the state's economic development secretary.
The move by the Mexican government is also an attempt to avert an energy crisis similar to the one in California two years ago. And it could make money off of California's hunger for energy by allowing these companies to sell natural gas to both Baja California and California.
"California seems short of energy supplies; so does Baja," said Charles Nathanson, executive director of San Diego Dialogue, which recently completed a study on border development and air quality. "A little independence from Texas would be a good idea."
For more than a year now, energy companies have been vying to be the first to build their terminals and capture both the U.S. and Mexican markets.
"There will be significant advantages for whoever gets there first," said Paul Boeker, president of San Diego-based Institute of the Americas.
He and many other experts believe the market for liquefied natural gas in the California and the Baja region is large enough for only one or two terminals.
"Once the first one is built, that will meet the marketplace needs," said Hulse, of Sempra, which plans to build an LNG terminal just north of Ensenada.
Shell also plans to build a gas terminal near the site Sempra has selected.
All this planning has drawn the ire of the developers of La Quinta Bajamar, an upscale condominium complex complete with a golf course that overlooks the Pacific Ocean. One-bedroom condos here would have a view of gas plants, said Roberto Valdes, whose father is the director of the complex.
"This is what we sell, the view," said Valdes.
A California company had agreed to buy the condominiums, but later reneged.
Marathon's proposed terminal in La Joya, just north of Rosarito, could also face some opposition as residents there are forming a group to fight the $1.5 billion project, said Orozco. That project is more expensive because the company plans to build a power plant, wastewater treatment facility and water desalinization unit.
All the energy companies except Shell have filed applications with Mexico's energy regulatory commission to build their terminals in Baja California. Shell filed an application to build a plant in Altamira, on Mexico's eastern coast, according to the commission.
A spokesman at the commission said it would take three months to decide on each permit application.
And the Mexican government must still set rules for installation of liquefied natural gas plants. The final rules should be published next year, and so far Mexico has only released emergency guidelines for the development of these gas terminals.
"Nobody is going to start construction on anything until the LNG rules are published," said George Baker, of the Houston-based consulting group Mexico Energy Intelligence. Even before these permits have been reviewed and the rules established, one company has already run into trouble.
Mexico's environmental agency, Semarnat, denied El Paso/ConocoPhillips its environmental permit. The electricity plant and Pemex facilities make Rosarito an inappropriate site for the gas terminal, the state government said.
Even after the government denied the permit last month, El Paso/ConocoPhillips officials continued work at the site.
Orozco believes the company likely will relocate to another area in the town.
"We've won the battle, but we don't know about the war," said Orozco, as he drove his truck past one of the many signs in Rosarito that expressed opposition to the project. "Not one inch to El Paso Energy," read one.
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