BajaNomad - Sempra LNG plant in Ensenada at center of showdown

Sempra LNG plant in Ensenada at center of showdown

BajaNews - 2-12-2011 at 06:59 AM

http://www.signonsandiego.com/news/2011/feb/11/ensenada-muni...

By Sandra Dibble and Onell R. Soto
February 11, 2011

A Mexican natural gas import terminal was the site of a showdown Friday between Ensenada's mayor and Baja California officials.

Ensenada Mayor Enrique Pelayo Torres ordered the Sempra Energia Costa Azul LNG plant shut down Friday afternoon saying there were "irregularities and flagrant violations to the law."

Municipal authorities put seals on the plant gates, but state officials stepped in to keep it operating, witnesses said.

"The plant has not been shut down," said Kathleen Teora, a Sempra spokeswoman. “Due to the quick response of the state and federal authorities in Mexico, the egregious actions of the mayor of Ensenada were rightfully thwarted."

The plant supplies natural gas from Russia, Indonesia and Qatar to users on both sides of the border, including large power plants.

The plant has been at the heart of allegations of corruption for years. Its owner, Sempra Energy, has denied those allegations.

Sempra is the parent company of San Diego Gas & Electric, which operates independently of the natural gas import terminal.

The plant's operation has permits from federal, state and municipal officials, said Baja California's Economic Development Secretary, Alejandro Mungaray Lagarda.

"The Sempra plant is operating legally," he said in a statement.

He chided the attempted closure of the plant and said the state would go to federal court "with the aim of ensuring the rule of law and punishing those responsible."

The head of Ensenada's business sector, Hector Contreras Luenga, denounced he city's move.

"This is very unfortunate for those of us who are interested in promoting business in Baja California," he said.

In his statement, Mayor Pelayo said that land-use permits were improperly issued, the plant is not adequately insured and Sempra hasn't told emergency officials how the plant works or how it was built.

"Municipal authorities don't have plans for roads, pipelines and other infrastructure inside the plant's area," he said.

He also said that the plant doesn't have a properly equipped emergency response center.

And he said construction of the plant has caused environmental damage on land and in the ocean.

Pelayo criticized a former mayor, Jorge Antonio Catalán Sosa, saying he improperly approved construction of the plant.

Pelayo belongs to the PRI, the Institutional Revolutionary Party. Catalán was a member of PAN, the National Action Party.

Rivalry between the two parties has been intensifying as Mexico prepares for presidential elections next year. The two parties are bitter political opponents. The PAN currently controls the Baja California and federal governments.

Sempra has been battling allegations of wrongdoing surrounding the plant in Mexican and U.S. courts.

A man who says the company wrongly took his land won a court ruling finding the company in the wrong, but a later ruling set that aside.

At the same time, a former Mexican manager has accused the company of bribing officials and of wrongly spending money on a conference center near the plant.

Sempra denies doing anything wrong, and says the allegations are thinly veiled extortion attempts.

BajaNews - 2-12-2011 at 07:01 AM

http://www.ensenada.gob.mx/?p=272

http://www.ensenada.net/noticias/nota.php?id=19818

woody with a view - 2-12-2011 at 07:05 AM

Quote:

And he said construction of the plant has caused environmental damage on land and in the ocean.

where was this goon when the land was in it's natural state?

RIP Harry's....

Russ - 2-12-2011 at 08:27 AM

I'm not sure that this is a bad thing to bring a mega buck industry into the public eye and have it scrutinized by the state & federal authorities.

[Edited on 2-12-2011 by Russ]

woody with a view - 2-12-2011 at 08:32 AM

http://preview.surfermag.com/photos/potpourri/harrys/index.h...

RIP.....

Mexican army secures Ensenada LNG plant

BajaNews - 2-12-2011 at 11:12 PM

http://www.signonsandiego.com/news/2011/feb/12/mexican-army-...

By Onell R. Soto
February 12, 2011

A tense standoff at a big natural gas plant that supplies Mexican and U.S. customers, including those in San Diego, ended only after Baja California officials and the Mexican army stepped in, the plant’s owner said.

More than 50 municipal police, dressed in SWAT-style uniforms, burst through two gates shortly after 4 p.m. Friday and entered a guardhouse that controls access to sensitive parts of the plant.

“They entered the building, but they couldn’t go anywhere beyond that because we have a hardened steel turnstile,” said Darcel Hulse, who heads Sempra LNG, which owns the plant.

"They did not penetrate in any way the operating portions of the plant," he said. "Had the actions gone beyond that, to the ordering of removal of operators from the facility, it would have been a real dangerous safety risk."

Baja California economic development officials arrived about two hours later and removed seals on the gates placed there by the municipal police.

Federal authorities dispatched the army to the plant about five hours after the standoff began.

No shots were fired. As of Saturday, the municipal police have left, but soldiers remain, guarding the facility.

The plant is a big part of the region’s energy infrastructure. Ships deliver natural gas cooled to 260 degrees below zero, which is used to make electricity and supply homes and businesses on both sides of the border.

At the time of the attempted shutdown, the plant was in "sendout" mode, meaning that the super-cooled natural gas was being warmed up and returned to gaseous state so it could be put into pipelines.

Both Sempra LNG and San Diego Gas & Electric are owned by Sempra Energy. They operate independently.

Ensenada Mayor Enrique Pelayo Torres ordered the plant shut down Friday saying there were “irregularities and flagrant violations to the law.”

Pelayo said a prior mayor improperly granted land-use permits and that local authorities lacked details about how the plant was built and how it runs that they would need in an emergency.

That former mayor belongs to a competing political party.

Using force to challenge approvals granted by prior elected officials questions the stability of doing business in the country, Hulse said.

"They're complaining about municipal planning regulations or zoning," he said. "What is the urgency on a Friday night? And what is the urgency of taking these actions without even having a discussion with us."

Hulse wouldn't respond to Pelayo's allegations point-by-point, but said the plant operates with all required permits. If Pelayo had questions about how it’s run, he could have simply asked for a tour.

Dispatching police to close the plant was dangerous, because the plant needs trained operators around the clock to ensure safety.

"There was absolutely no understanding and a callous disregard for the safety of our operation," Hulse said, calling the attempted shutdown "excessive."

"There were more than 50 heavily armed police — not just policemen in police cars — heavily armed in body armor and automatic weapons and ski masks over their faces," he said.

The police arrived with reporters and camera crews in tow.

"This was well-planned, well thought out," Hulse said. "It was a show of force and a media ploy."

In anticipation of such a move, Sempra obtained an “amparo,” or injunction, preventing a shutdown.

Late Friday, the president of the Mexican Energy Regulatory Commission sent Pelayo a letter asserting that the plant is operating within the law and that it’s up to federal officials, not local politicians, to regulate it.

The plant has been controversial for years. Lawsuits in Mexico and the U.S. have accused Sempra of corruption, taking land illegally and firing whistleblowers.

Hulse said those allegations are untrue, and that those who make them are trying to extort the company.

wessongroup - 2-13-2011 at 10:23 AM

WoW, even at this level buying property in Mexico... now these guys supposedly had big hitters.. setting this up... and one must know there was "graft" going in on this... from the Fed level, down to the local.. and many got some Sempra money...

To see a project the size and scope of this... being taken through the ringer.. is really a bit past pluto... and can't be doing Mexico very much good ... from the standpoint of "investors" looking over possible "moves" into Mexico ... then toss in the Miners strike.. and a few others and gee, what going to happen...

And that "municipal" police were used instead of, Federal and/or State Police is very interesting.. appears that lines of communications between folks in LE to "talk" things over need a bit of "review" ...... these lines of communication appear to lead to a rather confused application of law and regulations in the Country... as it relates to LAND: ownership, purchase, development and use....

Woooosh - 2-13-2011 at 10:29 AM

Quote:

Originally posted by wessongroup
WoW, even at this level buying property in Mexico... now these guys supposedly had big hitters.. setting this up... and one must know there was "graft" going in on this... from the Fed level, down to the local.. and many got some Sempra money...

To see a project the size and scope of this... being taken through the ringer.. is really a bit past pluto... and can't be doing Mexico very much good ... from the standpoint of "investors" looking over possible "moves" into Mexico ... then toss in the Miners strike.. and a few others and gee, what going to happen...

And that "municipal" police were used instead of, Federal and/or State Police is very interesting.. appears that lines of communications between folks in LE to "talk" things over need a bit of "review" ...... these lines of communication appear to lead to a rather confused application of law and regulations in the Country... as it relates to LAND: ownership, purchase, development and use....

The only ones investing in big projects are the cartels. They have all those narco-dollars they can't spend anywhere else now. Take a look back at the Trump Baja condo project- everyone got screwed and $30 Million gone. If The Donald's legal eagles can be had- there is little chance for the rest of us.

DENNIS - 2-13-2011 at 12:17 PM

I know the circumstances have little resemblence, but when I read about this, I immediatly think of Punta Banda, 2000. One side says you're OK in your investment and the other side, after the fact, says you're screwed.

NOTHING like Punta Banda

Dave - 2-13-2011 at 02:01 PM

Quote:

Originally posted by DENNIS
I know the circumstances have little resemblence, but when I read about this, I immediatly think of Punta Banda, 2000.

Regardless of right or wrong Sempra WILL prevail. The Mexican OLIGARCHY has determined that the LNG plant is in its best interest.

End of story.

DENNIS - 2-13-2011 at 02:13 PM

Quote:

Originally posted by Dave

NOTHING like Punta Banda

Like I said, the details differ, but the major litigation that comes up after the sale, in both cases, has a familiar pattern.
Mexico has turned "seller's remorse" into an art form for attorneys.
Thasall I meant.

JESSE - 2-13-2011 at 02:22 PM

There was a lot of problems with the permits, construction, and land issues with that plant right from the start. Obviously SEMPRA trew a lot of money into it, and that money ended in the hands of PAN politicians. Now the federal goverment is going to protect them against the city, but in 1 year we have presidential elections, and the PAN can lose.

The lesson is still the same after so many years, IF THERES PROBLEMS OR DOUBTS AT THE START OF THE PROCESS, THEY WILL COME BACK AND HAUNT YOU AT THE END.

Not Being Snarky

Gypsy Jan - 2-13-2011 at 06:21 PM

But owning property in Baja Mar is the pits, no?

DENNIS - 2-13-2011 at 06:55 PM

Quote:

Originally posted by Gypsy Jan
But owning property in Baja Mar is the pits, no?

Don't know. Is that the word? For all the years the place has been there, it's not been thrown into the equation with other parts of Ensenada. Kind of stood apart for the well-to-do.
Of course, now it must be like "The Land Of The Midnight Sun" with all those lights on up there. From my house, way across the bay, it looks like the worlds largest mall after the sun goes down.

durrelllrobert - 2-14-2011 at 01:47 PM

Quote:

Originally posted by DENNIS
I know the circumstances have little resemblence, but when I read about this, I immediatly think of Punta Banda, 2000. One side says you're OK in your investment and the other side, after the fact, says you're screwed.

or this from last year?

By Javier Aguirre Cruz (translation from April 2010)

MEGA PROJECT. " MEGA FRAUD ?

The estuary and Punta Banda, natural resources of humanity ( Photo: Courtesy)

The municipal official was referring to the mega tourism project , real estate, medical, agricultural , educational , commercial and livestock called Baja Pacific Hotel and Condo Resort, Baja Palms Condo Resort, says the company will develop Baja Pacific Resort Corporation, in partnership with the Mexican Blanca Lozano Fisher and American Dan K. Rice, who founded the corporation Lozano Development & S. Rice A. C. V.

According to these entrepreneurs, their projects in the Punta Banda estuary and valley Maneadero include the construction of a five star hotel quality , a thousand luxury condominiums, a world-class hospital , an exclusive commercial center of international quality , farms and fields of agricultural and livestock production , a marina for yachts that will destroy the tongue portion in sandy south, a fire station , construction of roads, golf course and wind power plants , geothermal power and desalination plants and treatment sewage .

On its website , Rice & Development Lozano claim to have purchased the land across the sandy tongue of land surrounding the creek and the wetland to realize everything they offer to prospective buyers of their services and potential investors.

But the lawyer Alfonso García Quiñones , co-owner of land in the sandy area of the tongue , categorically refuted the version of entrepreneurs.

"As far as my information goes , which is very recent , none of the owners that we are there sold. Not the Nieves Mrs. Fisher, but if you continue to own the Malamute , Jorge Cortinez and its partners, Guzman Enriquez family , the Pedroarena , Attorney Pazuengo Ocatavio Perez , Escoto Avila family , brothers and Mr Perinsky Valencia . None of them have sold their property. "

He clarified that none of the owners of the tongue are associated with property companies and developers to meet the company said Rice and Lozano as this on the internet.

"It's a company that announces the mega mega project, as not done one in Baja California, because it speaks to develop almost half Maneadero Valley , of all that is the stream , all that is the tongue. Well , the current Cancún would remain short of this ambitious project of the people who are advertising . "

Blanca Lozano Fisher believed that American Dan Rice actually what they do is something that Americans call the "Big I ", the" Golden Dream . "

This is because within the jurisdiction of the estuary the following projects are currently Cities:
1 .- The creation of a super irregular real estate tourism development that aims to establish a residential area for foreigners , not only within the wetland, but throughout Maneadero.

2 .- A division social interest Ensenada City Council approved changing land use in the area even against the advice of the governing body of urban planning , the Municipal Institute of Information and Planning ( IMIP ) - which identified the area as an ecological and high-risk for being conducive to flooding caused by both the Estero Punta Banda as San Carlos Creek .

3 .- A water desalination plant is to provide 250 liters per second of water to the city of Ensenada, hydraulic system of the state government was still not completed study because the scientific studies on environmental impact.

4 .- A treatment plant wastewater Maneadero town , a work that will contribute their surplus to the San Carlos arroyo , rain flows into the Estero Punta Banda, which is in turn support thousands of local and migratory birds and marine species that sustain various coastal fisheries of Ensenada.

In two of these projects is identified as the main promoters of two PAN political figures of the moment:

A) .- The Adriel Hugo Zepeda CPA Berrelleza , current candidate for the National Action Party (PAN ) to the municipal president of Ensenada, that being director of the State Public Services Commission of Ensenada (CESP ) authorized the start of construction plant sewage treatment Maneadero , in the vicinity of Estero Punta Banda, without federal permits .

This situation prompted the Ministry of Environment and Natural Resources ( SEMARNAT) rejected the Environmental Impact Assessment that CESPE introduced last summer to build the treatment plant .

At the same time the Federal Attorney for Environmental Protection (PROFEPA ) began an investigation of illegal start of the work by the Commission and is to determine administrative and criminal liability against those who ordered and carried out works before have permission federal building .

However, on the order of Politically, the Manifesto CESPE presented another Ambiental ( MIA ) to operate a treatment plant in its first stage will process 30 liters per second of raw sewage to conclude in the year 2047 , producing 120 liters per second ( three million 783 000 320 cubic meters per year) and serve nearly 45 thousand people.

The new MIA, the state commission filed in December 2009 , is now analyzed by the SEMARNAT , which this month will determine whether or not to give permission to the lawn to operate a treatment plant that did not meet the environmental requirements necessary for construction in the vicinity of Estero Punta Banda.

B) .- The current federal deputy for the 03 Electoral District of Baja California, César Mancillas Amador , who was the mayor of Ensenada at the town hall prompted the change in land use , ecological preservation , housing in the area of Estero Punta Banda . This is to encourage the developer Muñiz Humberto Montes.

This fractionator managed in October 2006, before the city government who presided César Mancillas , changing land use in the plot 531 of former Nationalist ejido Sanchez Taboada. On the subject Mancillas management discussed in the chapter of Ensenada although the IMIP opposed the request of the investor given that according to the Urban Structure Program proposed by the Urban Development to the Population Center City Ensenada 1995 , the area was destined to ecological preservation and not single family residential land use .

In March 2007 the council approved the application of the fractionator , who previously developed housing in the same area without authorization from government agencies. In its opinion , the magistrates considered that in approving the division opened the possibility of regularizing what had been done illegally by Muñiz , who continued to process to create the Dream residential subdivision with a first phase of 74 houses and then build and sell up to 305 apartments " average interest . "
In 2008 , now with new municipal administration , the Planning and Development Committee (COPLADEM ) convened a public consultation to publicize the draft Muñiz. There, city officials , state engineers , architects and environmental groups opposed the bill because it violated laws, was based on land prone to flooding, houses built highly nitrous land to the detriment of buyers and actually sold low-income housing .

According to the environmentalist Laura Martinez Rios , Mayor Pablo Alejo López Núñez, to learn the technical and legal details of the project, found that it not be approved and delegated to the councilor Mary Catherine Talavera Nava , coordinator of the Committee on Urban Development and Environment City Hall, do not need to be authorized .

However, in the second half of April COPLADEM again called for public consultation to present the same project and again the members of the subcommittees of Urban Development and Ecology , and the IMIP , the Councillor Talavera and federal and city officials rejected the project because it was the same , even when the developer presented a document where the parastatal CESPE irresponsibly is committed to provide water for fractionation.

Currently, Muniz and COPLADEM members are waiting for the Municipal Urban Management clarify the status of the project .

What was behind Ensenada LNG showdown?

BajaNews - 2-19-2011 at 07:20 AM

http://www.signonsandiego.com/news/2011/feb/18/what-was-behi...

By Sandra Dibble, Onell R. Soto
February 18, 2011

It was like a scene from an action movie. Dozens of police officers, some in SWAT gear, swarm a major energy installation, cutting through locks and confronting the operators. Hours later, the Mexican military arrives, and the municipal officers make a quick retreat.

The showdown a week ago came as Ensenada’s new mayor, Enrique Pelayo Torres, attempted to close the Costa Azul natural gas import terminal owned by San Diego-based Sempra Energy, saying its permits were not properly issued and that it posed a danger to his city’s residents.

But just days later, the mayor softened his stance, saying he was open to negotiations and wanted Sempra to pay taxes and supply natural gas to his seaside city.

Was it political theater by a cowboy functionary in over his head? Part of an extortion attempt? An expression of the rising political rivalries across Mexico?

The actions have been the subject of widespread speculation, but this much is certain: There’s a group of people who don’t want Sempra in Mexico, but the company has plenty of support among top officials.

Approved in 2003 by governments controlled by President Felipe Calderon’s National Action Party, the PAN, the billion-dollar facility has long been the target of critics in Mexico and the U.S.

They say that its permits were improperly issued, that its presence violates environmental laws and property rights, and that its location poses a danger to Ensenada’s residents.

Their complaints went nowhere, but now a shift in Baja California’s political makeup has provided new opportunities for Sempra’s detractors to challenge its presence on a scenic stretch of coastline some 50 miles from the international border.

The incident has laid bare the intensifying political rivalries in Baja California and across Mexico at a critical time. PAN and Mexico’s once-ruling Institutional Revolutionary Party, the PRI, are preparing for presidential elections in 2012, and in 2013 they are expected to face off in the Baja California’s governor race.

The man at the center of the controversy, Mayor Pelayo, is the 60-year-old owner of a Chinese restaurant. Pelayo, who was a federal legislator in the mid-1980s, rode into office last year in a PRI sweep of municipal and congressional elections across Baja California, a state that since 1989 had been dominated by the more conservative and pro-business PAN.

Little-known outside Ensenada, Pelayo gained widespread attention on Feb. 11, less than three months into his three-year term, when he sent his officers to the Costa Azul facility, accusing Sempra of “flagrant violations of the law,” including of safety, zoning and environmental regulations.

He insisted that he acted “mainly thinking of the people of Ensenada.”

The action has raised alarm in the business community and among government promoters who fear the action will discourage badly needed private investment.

“I think people will watch it very closely,” said James Clark, director of the Mexico Business Center of the San Diego Regional Chamber of Commerce. The potential for damage to direct foreign investment, he said, is “devastating.”

Ricardo Thompson, who heads an Ensenada business group, Coparmex, said Pelayo may be in over his head.

“The mayor is being used by interests that he may not even be aware of,” he said. “They have prompted him to take action.”

Whatever the reason, Pelayo’s move drew swift rebukes from top federal officials in Mexico City, who said he acted without authority and put at risk a facility that is critical to the country.

Pelayo has retorted that the criticism is “an orchestrated barrage of insults, slander.”

The terminal imports natural gas from overseas and puts it in pipelines leading to power plants, businesses and homes on both sides of the border. It was completed in 2008, and about half the gas it imports is consumed in Mexico. Because natural gas is worth more in Asia, it now operates at about half its capacity of a billion cubic feet a day.

The plant employs about 100 people, most from Ensenada, Sempra said. Construction created 3,100 jobs.

Baja California and national politicians have been adamant that Sempra, the parent company of San Diego Gas & Electric, has obtained all the permits it needs and complies fully with Mexican law. Sempra said the criticism stems from people who are trying to use the political process to extort money from it.

“We will defend our position against any and all attacks,” said Darcel Hulse, chief executive of Sempra LNG, the subsidiary that operates the plant.

Sempra said the incident had its origins in a long-running land dispute, still unresolved, with a Mexican named Ramon Eugenio Sanchez Ritchie, who has sued in Mexico and the United States claiming that Sempra took his land, which it needs for a buffer zone around the plant.

Sempra says it bought the land from the rightful owners and has clear title, and, in any case, the land is located in a buffer zone isn’t necessary for it to operate the plant.

Sanchez’s dispute has been a battle cry for some of Sempra’s fiercest detractors.

The critics found a foothold in Baja California this year, when a PRI state legislator took up their cause. In a written statement referring to a history of outside threats to Baja California’s territory, Nancy Sanchez, whose district is across the state in Mexicali, was harshly critical of Sempra and called on Ensenada’s administration “to analyze the permits granted by previous administrations,” to the Costa Azul facility, and determine responsibility “of those, abusing their authority, who violated the law, put at risk the population and trampled on the rights of citizens.”

Around the same time, Sanchez went to the Ensenada municipal government with his claims, asking a land-use official to step in.

That’s when Pelayo made the controversial move that earned him national notoriety.

Late on a Friday afternoon a week ago, Ensenada municipal police rolled up to the plant from the north — the opposite direction from which you’d expect them to come.

When plant officials refused to let them in, with cries that “this is not the Wild West,” officers used bolt cutters to slice through locks in two gates and then arrived at a guardhouse where heavy steel turnstiles stopped them.

An official used aerosol adhesive to post “Closed” signs sealing the plant.

The police posed a serious safety risk, said Sempra’s Hulse.

“Had the actions gone beyond that, to the ordering of removal of operators from the facility, it would have been a real dangerous safety risk,” he said. “A plant like that cannot be left without trained operators.”

Inside, workers continued the process of letting liquid natural gas stored in twin 17-story tanks slowly warm up, revert to a gaseous state, and put into a pipeline.

When federal police and the army showed up a couple of hours later, Pelayo said he ordered his officers to leave, “in the hopes of avoiding a confrontation.”

The military stayed on to guard the plant. Tuesday, Pelayo said he was open to negotiating with Sempra, hoping the company would pay his city taxes and build a pipeline. Thursday, he said he had asked the company to pay for an aqueduct to Mexicali a few months ago.

Sempra’s Teora said Pelayo had asked a government affairs director for the company about an aqueduct.

“We never gave him any indications that we would ever consider such a request,” she said.

“Stupid he isn’t, but maybe a little crazy,” said Cesar Mancillas, a former Ensenada mayor who is now a federal legislator in Mexico City representing the PAN. “He wants the approval of his party. Maybe he thinks that by striking against the PAN, he can aspire to another position.”

If that was his goal, it might have backfired.

Beatriz Paredes, the PRI’s national leader, questioned his decision this week when she visited the state and met with the five PRI mayors.

“I asked the mayor of Ensenada whether he had the authority to take the action that he did,” Paredes said in an interview Thursday. “I told him that dialogue was essential, and that any action that was undertaken that in relation to productive activities needed to have a legal basis.”

Even some of Sempra critics say they have been taken aback by Pelayo’s move.

Pelayo “is saying there were some irregularities when the land-use permit was authorized, and I agree,” said Horacio de la Cueva, a scientist at the Ensenada-based research institution, CICESE. “There are courts where you can appeal. I don’t think that shutting down Sempra is the way of doing it.”

Michael Shames, who has crossed swords with Sempra more than once as head of UCAN, the Utility Consumers’ Action Network, said Pelayo appeared to be grandstanding, because there are more legitimate ways to voice concerns about the plant.

“The concept of sending the police off to shut down the plant and then having a faceoff with the federal army?” he asked. “That was political theater. That’s when you know this is a soap opera that’s being performed live.”

Sempra Impasse in Ensenada Raises Questions

BajaNews - 3-6-2011 at 12:23 PM

http://www.kpbs.org/news/2011/mar/04/sempra-impasse-ensenada...

By Ruxandra Guidi
March 4, 2011

SAN DIEGO — Sempra Energy has declared that it got its environmental permits to build a massive liquefied natural gas plant in 2003. But recently, Ensenada Mayor Enrique Pelayo Torres claimed the company was operating without the proper environmental and safety permits. He'd also accused Sempra of bribing Mexican officials.

So when Pelayo Torres was challenged by American reporters in Ensenada a couple of weeks ago, he defended his decision to temporarily shut down the plant.

"Their environmental impact study was for two tanks, and now they have four," said Pelayo Torres. "Besides, the permits given to them by my predecessors were definitely questionable."

The Sempra project in Ensenada has been controversial for years. Sempra representatives say the allegations are unfounded.

But regardless of the outcome, the episode is already sending a warning to U.S. investors.

"(It's a warning) whether you're talking about tourism markets, manufacturing or even personal investment," said Kenn Morris, president of Cross Border Business, a market analysis firm focused on the U.S.-Mexico border. "If the issue is that local governments and state governments really can't get their acts together to provide some sense of confidence on property in places like Baja California, then that will really stifle investment."

Morris added that many investors from both sides of the border are keeping a close eye on this case. Meanwhile, leaders in Baja and in other border states have made efforts to lure U.S. investment during the economic downturn.

Woooosh - 3-6-2011 at 12:54 PM

Quote:

Originally posted by BajaNews
But regardless of the outcome, the episode is already sending a warning to U.S. investors.

"(It's a warning) whether you're talking about tourism markets, manufacturing or even personal investment," said Kenn Morris, president of Cross Border Business, a market analysis firm focused on the U.S.-Mexico border. "If the issue is that local governments and state governments really can't get their acts together to provide some sense of confidence on property in places like Baja California, then that will really stifle investment."

This is news? Really? To whom? Individual real estate "investors" learned they can't win in Mexico from episodes like Punta Banda and Trump Baja. Corporate weiners like Sempra investing shareholder money are slow learners indeed, and we end up paying for it in higher rates. I'm not saying SEMPRA isn't culpable to some degree- but in a game with no honor or trustable referees- it is hard to tell the real score.

[Edited on 3-6-2011 by Woooosh]

BajaGringo - 3-6-2011 at 02:36 PM

There has been a lot of talk that the the previous PAN administrations accepted some hefty campaign donations to give Sempra a sweetheart deal. They tell me that Pelayo doesn't necessarily want to push out Sempra but instead put pressure on them to pay Ensenada more $$$ in fees and permits, in line with what they would normally pay elsewhere.

We'll see how this plays out...

Bajahowodd - 3-6-2011 at 05:19 PM

Let's get serious. Is someone going to turn that site into a theme park?

Of course, money will talk.

Dave - 3-6-2011 at 11:59 PM

Quote:

Originally posted by BajaGringo
They tell me that Pelayo doesn't necessarily want to push out Sempra but instead put pressure on them to pay Ensenada more $$$ in fees and permits, in line with what they would normally pay elsewhere.

I believe that Pelayo wants Sempra to put more $$$ in his pockets.

BajaGringo - 3-7-2011 at 09:56 AM

Quote:

Originally posted by Dave

Quote:

I believe that Pelayo wants Sempra to put more $$$ in his pockets.

If that were his main objective then he handled this very badly. Making this a very public confrontation has now put a lot more eyes on the whole Sempra deal with many asking where is the economic benefit for Ensenada out of such a huge project?

Of course I have no doubt that they will be sure to make a nice "donation" to some "other" particular cause that Pelayo "suggests"...

Dave - 3-7-2011 at 11:47 AM

Quote:

Originally posted by BajaGringo
If that were his main objective then he handled this very badly. Making this a very public confrontation has now put a lot more eyes on the whole Sempra deal with many asking where is the economic benefit for Ensenada out of such a huge project?

I'm sure it started out quietly and when Sempra didn't offer enough he went rogue. Sempra has a deal at the highest levels of the Mexican government and probably considers Pelayo a minor nuisance, at best. He'll probably get some political mileage out of it, though.

As I said before, this exercise is a waste of time. Sempra has invested a boatload and ain't going nowhere.

BajaGringo - 3-7-2011 at 01:43 PM

Quote:

Originally posted by Dave

Quote:

The original deal was cut with the PAN government and the balance of power has shifted both at the state and federal levels. Even with Calderon still president, the PAN party has been weakened significantly and has lost most of the control they once enjoyed. Pelayo may only be the presidente municipal of Ensenada but he has some serious clout backing him in Mexico City.

If Sempra is smart they will cut a deal with Pelayo / Ensenada IMHO. I say this as someone who is a vendor to Sempra so believe me that I am not interested in seeing them leave any time soon.

Just sharing what my sources are telling me...