Border Gas Growth Highlights Need for CA-Mex Energy Entity

By Published On: May 23, 2005

With so much growth potential from imported liquefied natural gas, a call was put out this week for the U.S. and Mexican governments to work more closely together to address energy issues. ?We need to have a binational planning entity of some sort,? Alan Sweedler, director of San Diego State University?s Center for Energy Studies, said during a May 18 panel discussion on energy supply and demand. ?We need to establish a formal government entity to constantly be aware of the changing situation [or] we?ll all wake up 10 years from now and find all kinds of power plants that no one called for.? Sweedler?s comments came during a daylong workshop of the California Energy Commission?s Integrated Energy Policy Report committee. Topics discussed included the Southern California?Baja California border region?s increase in energy supply, demand, and development, as well as environmental quality on both sides of the border. The need for financial investment in gas projects also was stressed. ?Time and attention has to be paid to potential projects,? and ?the infrastructure could really use a lot of help from California,? said Michael Brown of Brown & Associates. ?We?ve been doing this a long time; they?re kind of new. They could really use our nurturing and guidance.? To meet the growing demand for electricity and natural gas, the energy sectors of both Southern California and Baja California are becoming increasingly integrated. Other topics discussed at the workshop included demographics and trends in the California-Mexico border region; economic development opportunities and challenges; environmental issues and opportunities along the border; and demand assessment. Although San Diego?s electricity growth typically results in 2-3 percent annual increases, such increases have exceeded 6 percent annually in Baja California over the last 5 years. The trend is projected to continue for another 5-10 years. However, no electricity capacity shortfall is projected on either side of the border through 2012. Air quality in the border region is a significant problem, though. It violates most established ambient air-quality standards in both the U.S. and Mexico for ozone and particulate matter. The Mexican side of the border also violates carbon monoxide standards. Among the other interregional electricity exchange issues are congestion around the Miguel substation caused by electricity flowing from new power plants just south of Imperial County?s border with Mexico, and current transmission lines not large enough to deliver all needed power. San Diego Gas & Electric forecasts natural gas demand to grow between 1.2 and 1.6 percent annually, driven in the near term primarily by power plant demand. Simultaneously, Baja California gas demand is projected to grow by as much as 7 percent annually, primarily for electricity generation and industrial heat. Although several LNG projects have been proposed in Baja California that could also supply gas to meet demand on both sides of the border, the ability to import potential new supplies of natural gas from LNG facilities to Southern California from Baja California is constrained by the capacities of SoCal Gas and SDG&E gas transmission systems. Importing LNG from Mexico to Southern California would require improvements to the SDG&E system to reverse the flow of gas and expand its capacity. In a report, Energy Commission staff recommended that the energy policy report committee consider participating in working groups addressing air quality, water quality, energy, infrastructure, and transportation. In addition, it urged involvement in policy forums that offer the Energy Commission direct contact with U.S. and Mexican federal environmental agencies with authority to effect changes in each area.

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