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Bechtel's Mexican Power Plant Circumvents US Environmental Laws
Published on Monday, September 1, 2003 by Reuters
Controversy for U.S. Firms' Energy Plants in Mexico
by Deborah Tedford
 

MEXICALI, Mexico - Two power plants in the Far North of Mexico may help alleviate U.S. energy needs, but a battle over their potential effect on the environment is heating up.

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U.S.-based InterGen and Sempra Energy Resources powered up the turbines of two power plants in the Mexican border city of Mexicali, Baja California, earlier this year, promising to supply electricity to California consumers and hopefully prevent another energy crisis in the state.

But the Mexicali Valley and cross-border neighbor Imperial Valley, California, already have higher than acceptable levels of particulate matter -- dust, ozone and carbon monoxide -- by Mexican and U.S. standards, according to data from the Air Resources Board of California.

Environmentalists say the pollution is likely to worsen because the companies are skirting U.S. laws by building in Mexico, where they are not required to offset particulate matter emissions -- or air pollution -- with community projects that reduce regional air contamination.

A coalition of Mexican and U.S. environmentalists called the Border Power Plant Working Group filed suit in California to halt the power flow from InterGen's La Rosita Energy Facility and Sempra' Termoelectrica de Mexicali, both of which began commercial production earlier this year.

ILLEGAL PERMITS


Environmental and human rights groups have charged that Bechtel, in a partnership with Shell called InterGen, circumvented U.S. environmental laws by building a power plant on the Mexican border for the sole purpose of exporting energy to the United States. The La Rosita InterGen plant located in Mexicali, Baja Calif., and partly owned by Bechtel, was the subject of a May 6, 2003, court ruling that found that the U.S. Department of Energy and Bureau of Land Management had acted illegally in granting permits to InterGen to build this power plant.

Public Citizen
In May, U.S. District Judge Irma Gonzalez ruled the Department of Energy illegally issued permits to connect the Mexican plants to the U.S. power grid by failing to order a complete environmental study of the Mexican plants' impact on air and water in neighboring Imperial Valley.

She ordered the study to settle the question and will decide by next year if emissions are significant enough to halt the flow of electricity into California or require additional controls.

Mike Niggli, president of Sempra Energy Resources, said his company's plant is already one of the cleanest in North America.

"We built this facility to meet the strictest standards in California. We could set this plant down anywhere in California," he says, noting that state-of-the-art technology makes it cleaner than old plants operating in California.

Mexican officials say the plants meet Mexican standards and the tax revenues they generate have enabled Baja California to make infrastructure improvements that offset pollution.

Mario Juarez, under secretary of economic development for the state of Baja California, said the state is paving many dirt roads -- a perk partially enabled by the taxes the companies pay and their monthly $1 million tab for using city and state services.

He notes that Japanese carmaker Toyota Motor plans to build a $148 million truck factory in Baja California, and state officials are courting several other companies.

In the past, energy companies have expressed interest in building as many as 20 plants on the Mexican side of the border to export energy to the United States, a key reason environmental groups want strict pollution controls.

WATER A FACTOR

They say the Mexicali plants will increase the levels of airborne contaminants in the already polluted air basin and consume about 12 million gallons of sewage water a day to cool their turbines.

Mexican environmentalist Fernando Medina says he is not opposed to the plants but wants to ensure that these and future plants meet the highest standards and use a dry cooling system to conserve water.

"Mexico and the United States are fighting over water from one end of the border to another," says Medina. "How much sense does it make to allow big consumers of water to locate here?" he said.

Niggli said Sempra built the facility in Mexicali to avoid California's lengthy licensing process. He estimates it would have taken up to 22 months to license the plant in California, but it took only five months in Mexico.

The plant produces 600 megawatts of electricity that can be sold in southern California, Arizona or northern Baja California.

The company spent about $350 million on the facility, including $18 million on a wastewater treatment plant and $20 million on air emissions control equipment -- both strictly voluntary, Niggli says.

InterGen's $750 million facility generates about 1,000 megawatts of electricity, said InterGen vice president Stephen Raab. InterGen is a joint venture of Royal Dutch/Shell and construction firm Bechtel Group Inc.

About half the power generated is sold to the Commission Federal de Electricidad, the Mexican power company. The other half has been earmarked for California but could be sold anywhere, he said.

Copyright 2003 Reuters Ltd

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