Resort Balks at Energy Hub Plan

ROSARITO BEACH, Mexico —  A proposal to turn this tourist resort just south of the U.S. border into a major energy hub has unleashed a fury of resentment among local leaders.

They are waging a fierce fight against a sophisticated corporate public relations campaign in favor of a liquid natural gas terminal.

Just last Tuesday, a dozen global energy company executives in dark suits filed into a banquet room at the Rosarito Beach Hotel to pitch their plan to build a $460-million gas plant in the heart of town.

The plant, they told an equal number of casually dressed Rosarito civic leaders, would generate 1,400 jobs and pump $15 million a year into the local economy. The townspeople were assured that the chances of a catastrophic accident at the gas plant would be less than that of dying from a bee sting.

The group listened patiently, and then let the visiting corporate executives have it. One of the first to confront them was furniture store owner Eduardo Orosco, who was one of many who didn’t buy the pitch.

“Don’t B.S. me,” Orosco grumbled, standing nose to nose with one of the men in suits. “What makes you think terrorists won’t target your plant to get back at America?”

Responded Rob Bryngelson of El Paso Global LNG: “Say, I’d like to talk to you more about that. Call me sometime.... What’s most important to us is making everyone feel comfortable.”

“Yeah, right,” Orosco replied.

So ended the most recent attempt over the last eight months by a partnership of El Paso Global LNG and Phillips Petroleum Co. to forge a working partnership with leaders of the town of 100,000 best known for its seaside hotels, restaurants, watering holes and rowdy spring-break revelers.

Now, proponents and detractors are gathering their forces for bigger battles ahead over what would be the only facility of its kind on the Pacific Coast, and the largest private investment ever in Rosarito Beach.

But Rosarito is just one of several Mexican and American coastal communities targeted for such facilities, which receive natural gas via pipeline from ships, to be burned at power plants that produce electricity.

In fact, liquid natural gas is among the most efficient, abundant and cleanest-burning fuels in the energy business. It is also among the safest.

North of the international line, Occidental Petroleum had hoped to build a $250-million natural gas terminal next to the Ormond Beach power plant in Oxnard. But that land was purchased last week for a nature preserve.

Along the coast of Baja California north of Ensenada, at least four energy plant proposals remain in play.

The campaign over the Rosarito Beach proposal has been particularly contentious.

Galvanized by what they view as a threat to the rhythms of life in the town that incorporated in 1995, local leaders have organized street demonstrations and launched letter-writing campaigns to Mexican federal authorities, including President Vicente Fox.

The energy firms have taken out full-page ads in Rosarito Beach newspapers, conducted surveys and passed out brochures during an intensive door-to-door campaign, extolling the project’s benefits.

In March, the firms sent 20 local business and political leaders on an all-expenses-paid tour of a model natural gas plant in Baltimore.

Hugo Torres, owner of the landmark Rosarito Beach Hotel, is among those who worry that the project is not safe and is all but certain to destroy the beach town’s charms.

“They want a back door to the California market,” Torres said, although corporate officials say most of the electricity would be consumed locally. “But we don’t consider ourselves energy producers; we are a tourist center.”

“Who will win?” he asked. “I can’t say. But we are at a critical juncture in this fight.”

Rosarito Beach Mayor Luis Enrique Diaz was unavailable for comment. But his spokesman, Macario Gonzales, said the mayor has said that if a majority of residents wants it, he will recommend issuance of a permit. If not, he won’t.

The final decision will be made by the Rosarito Beach City Council.

The Rosarito location is favored for its proximity to several natural-gas-fed power plants under construction or on the drawing boards south of the border.

Some of the gas, however, would be piped to energy-hungry Southern California.

Billions of Dollars in Revenues at Stake

Potentially at stake are billions of dollars in revenues.

By 2010, Baja California’s demand for natural gas is projected to grow more than five times from what it is today, from 150 million cubic feet per day to 800 million cubic feet per day, Mexican energy authorities say.

Without new sources of the clean-burning fuel to meet the demand, the growth of the region’s economy is threatened, the energy companies say.

By most accounts, however, power plants in Baja will need only one natural gas facility to meet their needs.

Competing with Phillips’ proposal in Rosarito Beach are the Royal Dutch/Shell Group and Sempra Energy of San Diego, both of which want to build natural gas terminals just north of Ensenada and within sight of the Bajamar golf resort, about 70 miles south of the border.

Marathon Oil Co. and Pertamina, Indonesia’s state oil company, hope to build a $900-million project in Tijuana, roughly 15 miles south of the international line.

Each would involve construction of fuel silos and piers of up to half a mile in length for ships, which environmentalists fear could block the paths of gray whales that swim by twice a year in their 5,000-mile migration from feeding grounds in the Arctic to nurseries in southern Baja.

In Rosarito Beach, many business owners fear the 261-acre site’s silos, pipelines, power lines and truck traffic would transform picturesque coastal vistas into a bleak industrial landscape.

As it stands, however, Rosarito is far from pristine. The first thing a southbound visitor sees when coming into town is an industrial zone with an oil-fed power plant with 100-foot stacks belching dark, acrid smoke. Nearby stands a sprawling fuel oil storage depot of enormous rusting tanks and rumbling big rigs. The proposed terminal would be built between those facilities.

Those images are conspicuously absent in the colorful renderings of the gas plant that project managers have been handing out around town. They depict gleaming white gas silos surrounded by vast, manicured lawns under clear blue skies.

Richard Reyes, a spokesman for the project, said recent survey results show the public relations campaign has made a difference.

“Prior to the campaign, folks were 3 to 1 against the proposal,” he said. “Afterward, it changed to a 50/50 split.”

Still, some locals have their minds made up: Building a fuel distribution center doesn’t make sense, given the existing industrial zone’s track record, they say.

Series of Accidents Weighs on Foes’ Minds

A week after the Sept. 11 terrorist attacks, an accidental explosion in a Rosarito power plant generator shook the ground and knocked out the region’s electrical service for a day. Late last year, trucks belonging to the state-owned oil company Pemex were blamed for two separate oil spills on downtown Rosarito streets. This month, an oil spill dirtied the coast.

Those incidents have weighed heavily on the minds of Rosarito physicians, architects, teachers and business owners, who have organized to block the plant.

Tuesday night, while sipping English tea and diet sodas at a downtown restaurant, they hatched a plan to send hundreds of letters written by local elementary school students to Mexico’s first lady, Martha Fox. She has emerged as her husband’s liaison to women, children and the poor.

Earlier that day, a group of business leaders led by Rosarito Beach Hotel owner Torres and furniture store owner Orosco agreed to fund an independent review of the gas plant proposal.

“We want a scientific study of the potential impact on our city, and then time to review that information,” said Rosamaria Plascencia, who heads a civic association that makes recommendations on new business proposals.

“These companies thought they were just going to roll over us,” Orosco said. “But it’s not over yet.”

Alan Sweedler, director of the Center for Energy Studies at San Diego State University, believes the groundswell of grass-roots activism reflects a positive change in a place that has been regarded as a permissive border hangout.

“The Mexican public is getting sophisticated about these kinds of things,” Sweedler said, “and the companies are learning they’ll have to win over a large number of people before they can build in a place that views itself as a tourist destination.

“Many people in Rosarito compare building a natural gas plant in their backyard to sticking a power plant in downtown Carmel.”

It’s not just Rosarito Beach.

About 15 miles to the south in Bajamar--a gated community of 300 residents, condos and luxury homes, two hotels and a 27-hole golf course--American homeowners also are feeling “dumped on,” because such facilities would face huge hurdles in the United States.

In Bajamar, they say, a natural gas plant would be an eyesore, and potentially devastating to real estate values at the development where 5,000-square-foot homes on the bluff go for $500,000.

Colorado businessman Peter Salg, president of the 225-member Bajamar homeowners association, said, “What is deeply disturbing to me is that we have heard absolutely nothing about any of this from Mexican government officials.

“Given that we’re only about 1,000 meters from the proposed industrial development, you’d think some Mexican government agency would be informing us about what’s going on.”

The mayors of Ensenada and Rosarito have been under considerable pressure to block, or approve, the projects in their respective communities. They are still weighing the arguments.

The same could be said for residents in Rosarito’s Colonia Reforma, a neighborhood of brick homes and shacks crisscrossed by dirt roads only a few hundred yards from the terminal site.

Bricklayer Gabriel Dominguez, 32, was excited about the project until he learned that all but 60 of the 1,400 jobs it would generate would be temporary construction work positions and not permanent.

“I don’t want it if there are no benefits,” he said. “Can’t they build it someplace else?”