Monday, October 20, 2003

 

Bolivian domino effect could hurt Mexico and U.S.A. energy plans

 

By Barnard R. Thompson

 

Following weeks of demonstrations and riots that led to at least 65 deaths, Bolivian protestors drove President Gonzalo Sánchez de Lozada from office on October 17.  This time around, what started everything in this poverty stricken nation was not tin mining labor disputes or coca production (directly at least), but the past government’s intent to sell and export liquefied natural gas (LNG) to Mexico and the U.S.A.  And adding insult to injury, the plan called for the gas transmission to go via a port in Chile, that inflamed historic anti-Chilean ire and nationalist demands.

 

And all of this could have negative domino effects.

 

The LNG and other energy sector projects in northern Mexico are most certainly important to the country, but they are just as important to the U.S.A., in particular California — the primary future export market for newly generated Mexican electricity.  But the cause and effect of what is taking place in Bolivia could spoil the future plans of many.

 

The Mexican government must be assessing the fact that opponents to gas projects brought down a government.  And in congress, this could become yet another excuse for legislators to debate energy reforms ad nauseam while doing nothing.  At the other end of the spectrum, the grassroots level success of Bolivian protesters must be fuel for the fire in local opponents in Mexico and the U.S.A.

 

Some anti-border area energy plant demonstrations and media protests have already been taking place in Baja California and other parts of Mexico, and those might now escalate.  As a matter of fact, a leftwing newspaper in Mexico City, La Jornada, is already running articles and op-ed pieces criticizing foreign investor energy projects in Baja California.

 

As well, La Jornada has jumped on the Bolivian “people’s” bandwagon, tying that which is taking place in the South American country to Mexico and — by extension — the U.S.A., in what certainly seems to be part of a developing campaign to defeat President Vicente Fox’s northern border energy development plans.

 

The following is an edited translation of a piece from the newspaper.

 

“October 18, 2003 (La Jornada, Mexico City)

 

“The Fox government’s infrastructure energy plan is in check, by Israel Rodríguez

 

“The popular uprising in Bolivia, against the exportation of LNG to Mexico through Chile, has placed the most important energy infrastructure project of the Fox administration in check.  That (project), to produce energy in the northwest of Mexico to supply California, is dependent on the shipment of gas from the South American country.

 

“Transnational companies, like Marathon Oil Company, Royal Dutch/Shell, Chevron-Texaco and Sempra Energy, have received permits for the construction of plants on the border with the U.S.A. from the (Mexican) Energy Regulatory Commission (CRE).  Gas from Bolivia and Indonesia would be processed in order to supply electricity-generating plants built by foreign companies.

 

“However, with spiraling social conflicts in Bolivia — that brought about the resignation of President Gonzalo Sánchez de Lozada — due to public opposition to transnational companies like British Gas Petroleum and Repsol/YPF being the main beneficiaries of gas exports sent via the port of Patillos, Chile, to Mexico and the U.S.A., the medium-term viability and profitability of the Mexican border region energy infrastructure projects are in question.

 

“Sempra Energy, a subsidiary of Enron (sic) — the energy company behind a huge fraud in the U.S.A., began operations in late July of a plant built in Mexicali, the first of five electricity complexes that are to go into service in coming months.  Their main fuel supply was to be the gas from Bolivia.

 

“Marathon Oil Company, headquartered in Houston and one of the principal energy companies in the U.S.A., received the first authorization from the CRE to build and operate a LNG storage facility, near Tijuana, on April 30, 2003.  This company intends to build a regional energy center in Tijuana and Rosarito, with the LNG storage terminal, a regasification plant, an electricity generating plant and a seawater desalination plant.  Work is expected to begin in early 2004, with completion scheduled for 2006.

 

“Royal Dutch/Shell and Chevron-Texaco are preparing to build four gas storage and regasification facilities in Baja California and Altamira, Tamaulipas.

 

“Repsol/YPF, the Spanish company, won the Burgos Basin gas exploitation bidding.  This company, that had a contract for gas transmission from southern Bolivia to the markets in the U.S.A., has strategically located itself in northern Mexico in order to continue with the gas supply project to the Mexican market, but with the goal of gaining a solid hemisphere wide energy market in the future.”