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Posted on 01/13/2003 5:20:25 AM PST by snopercod
Explosive growth in the demand for electricity and natural gas in northern Mexico has created huge opportunities for enterprising companies in Arizona as well as the rest of the country.
Firms such as Tucson Electric Power Co., El Paso Corp. and San Diego's Sempra Energy are getting their feet in Mexico's door, in part, by heading through Arizona's border with Mexico. The result could be a more stable power supply for the Valley and a market for a group of power plants under construction in Maricopa County.
But these plans face daunting challenges.
The North American Free Trade Agreement opened the door for U.S. companies to do business with government-controlled utilities in Mexico, but the courts there are questioning the constitutionality of such arrangements.
The indecision in Mexico has stalled development of a 500-megawatt power plant in Nogales that would sell energy across the border.
"We're on hold waiting for the Mexican side to get its act together," said Hugh Holub, president of the Maestros Group, the plant's developer.
Mexican politics isn't the only challenge. Companies working to tap into the lucrative Mexican energy market also are dealing with angry environmentalists and lenders that are shell-shocked by recent energy industry scandals.
But they are far from giving up.
Demand for electricity and natural gas in northern Mexico is growing between 10 to 15 percent a year, more than double the rate of many of the Southwest's fastest-growing metropolitan areas.
Without the resources to make the estimated $100 billion investment in energy infrastructure needed over the next ten years, the Mexican Government has turned to companies in the United States and other countries. Such cooperation is made possible by the North American Free Trade Agreement of 1994, which all but eliminated tariffs on natural gas and electricity and permitted foreign investment in Mexican power plants, pipelines and transmission lines.
To sell electricity and natural gas in Mexico, U.S. companies must obtain a presidential permit from the U.S. Department of Energy and go through the Comision Reguladora De Energia or Comision Federal De Electricidad in Mexico. The agencies typically put out bids for natural gas or electricity and award supply contracts for as long as 25 years.
But the practice has been put on hold while Mexico sorts out the constitutionality of making deals with foreign companies.
In April, the Mexican Supreme Court struck down energy reforms issued by President Vincente Fox and cast doubt on the constitutionality of 1992 legislation that permitted some private business participation.
While Mexico moves to enact constitutional amendments to open its energy markets, U.S. companies are moving forward with transmission line and pipeline projects that will give them access to Mexico.
Tucson Electric and Public Service Co. of New Mexico want to build separate power lines across Arizona to connect Mexico with the western power grid, the first time for such connections.
That would improve the reliability of the state's power grid and lessen the possibility of blackouts, those companies said.
Art Larson, a spokesman with Tucson Electric said the wildfire-related blackouts experienced two years ago could have been avoided if it could have brought power up from Mexico.
The connections also would provide Tucson Electric, Public Service Co. and other power producers an outlet for their excess electricity.
That would be good news for the half dozen power plants that have been recently constructed in Maricopa County.
Plant construction in the county and elsewhere has stalled because of excess supply, plunging prices and industry scandals, sparking banks to call loans and balk at providing long-term financing for the projects.
Companies also are setting up gas lines to fuel those plants and gain access to the Mexican market.
El Paso Corp. is extending its U.S. natural gas distribution system into Mexico at Nogales and other points and San Diego's Sempra Energy is building a pipeline from Ehrenberg, Arizona to Rosarito in Baja California. The line will supply gas to a handful of power plants planned for the border area, including a $350 million plant Sempra is building in Mexicali, Mexico.
If the plants are completed and get connected to the western grid, it could change the way power is supplied to the West.
"It's never been done before," said Julie Grey, a spokeswoman for Albuquerque's PNM Resources, parent of Public Service of New Mexico.
But the lines have drawn criticism from environmental groups, particularly the Tucson Electric line that would run through Coronado National Forest in southern Arizona.
The project is opposed by the Sierra Club, which contends power lines are a hazard for some bird species and that the construction could invite invasive plant species.
Both companies are working on environmental impact studies.
Environmentalists also have accused Sempra of building plants and gas lines in Mexico to skirt tough environmental laws in the United States.
Much of the power from Sempra's Mexicali plant is targeted for San Diego, Los Angeles and the rest of the United States and the Baja pipeline will also serve U.S. customers via a link in Tijuana.
Tom Murnane, a Sempra spokesman in San Diego, said the company located the plant in Mexico because the permitting process was shorter, not because of lax environmental rules.
"We voluntarily built Mexicali to meet California air quality standards," Murnane said.
Mexican politics isn't the only challenge. Companies working to tap into the lucrative Mexican energy market also are dealing with angry environmentalists and lenders that are shell-shocked by recent energy industry scandals.
Plant construction in the county and elsewhere has stalled because of excess supply, plunging prices and industry scandals, sparking banks to call loans and balk at providing long-term financing for the projects.
Well, that's it, then. No more power lines in this country. And we should take down the ones that we have.
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Here in SE NM powerlines (and power poles) provide resting/nesting sites for many birds, mainly hawks, crows, and some eagles. Without power poles, there would be less of these species in our treeless environment. The power companies are well aware of the dangers to birds from perching/nesting and most have the lines far enough apart for them to avoid damage. Another vacuous arguement from those who brought us last summers forest fires.
Here in SE NM powerlines (and power poles) provide resting/nesting sites for many birds, mainly hawks, crows, and some eagles. Without power poles, there would be less of these species in our treeless environment. The power companies are well aware of the dangers to birds from perching/nesting and most have the lines far enough apart for them to avoid damage. Another vacuous arguement from those who brought us last summers forest fires.
O.k. This is wild and you all can help me sort it out. Back when I was in school at the UofA in the early 70's, there was a person by the name of Hugh Holub who was a journalist who wrote for an alternative/satrical newspaper. A search on Google shows him the editor for a publication called the Bandersnatch as recently as 2000. Further search shows him to be City Attorney of Nogales around 1999 and likely in private practice in 2001.
In April 1998 he was mentioned in a news brief found at a group called FSEEE (Forest Service Employees for Environmental Ethics) out of Eugene Oregon (Gampa Dave, you must know about this group). The news brief mentions an effort by Holub to have a species of trout (sand trout [salmo dessicata]) listed as an "endangered species", which has never been acted upon. A closer reading of the news brief RAINS, OWLS THREATEN SAND TROUT shows that the entire article is a brillant spoof on endangered species and attempts to list just about anything as endangered! And this group swallowed it, hook, line and sinker!
My question is, is the power plant project proposed by Holub's group, for real, or just another spoof? Has he conned investors or does he have a real chance at this?? Any one in Tucson know?
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