Monday, April 25, 2005

California Mexico Engage in Tortise, Hare race for Energy

Last week Ventura County Star writer Tim Herdt wondered whether California should slow down the development of liquefied natural gas terminals to ponder which would be best for the State:

The race in question is the petrochemical free-for-all to see which of several of the world's biggest oil companies will win the right to build California's first liquefied natural gas terminal.

As a gas, the fuel most commonly used to power electricity plants in California must be shipped by pipeline, which limits the available supply. As it now stands, users in California can purchase natural gas only from fields in the West and Southwest.

But when the gas is frozen, it becomes liquefied, meaning it can be loaded onto tankers and shipped across the sea.

What those tankers need when they get to an American shore is a place to unload the liquid, a place to convert it back to gas and a pipeline to connect to the existing network of underground lines.

That's the race. It's for the right to receive those tankers, process their cargo and open California to markets in Asia and the Middle East.

What Herdt misses is that every day California sits on its hands, it is losing the race to Mexico. Because Mexico has less stringent environmental regulations than California, it is approving LNG terminals like they are going out of style:

Mexico's environmental agency has approved another liquefied natural gas receiving terminal for Baja California.

The $55 million floating project would be built about five miles off the coast of Rosarito Beach by Moss Maritime, a global leader in LNG tanker construction, and Mexican partner Terminales y Almacenes Maritimos de Mexico (TAMMSA).

If the market will bear only so many LNG facilities along the West Coast, wouldn't it make more sense to build at least one of them in California where we can have at least a degree of environmental protection?!?