Energy andEnvironmentin theCalifornia–Baja CaliforniaBorderRegion:Race to the Bottom?Good Neighbor Environmental Board MeetingBill Powers, P.E.,Powers EngineeringJune 16, 20111U.S.and Mexico nominate members for cross-borderelectricity task force–noenvironmental presencesource: Business News Americas,Governments nominate members forcross-border task force–Mexico, November 3, 2010.Presidents BarackObama and Felipe Calderon agreed toestablishcross-borderelectricity task force in May 2010.Charged withadvancing power transmission, gridconnections, and trade in renewable energy technologies.October 18, 2010 task force scopingmeeting (San Diego)co-sponsoredby Mexico energy ministry SENER &DOE.Followingday government officials met by themselves tonominatethe task force members.No U.S.or Mexico environmentalagency representativeswere at scopingmeetingor are on the task force.No public informationon who the task force membersare.2Senators Feinstein and Boxer are not onboard withBaja California as energy hubforCaliforniasource: Joint Sen. Feinstein/Sen. Boxer letterto Sempra CEO Don Felsinger, March 9, 2011.March 2011 letter toSempra: Adding power from MexicotoSunrise Powerlink(transmission line) would limit line’sability todeliver renewable power fromImperial County.Imperial County has highest unemployment rate inCalifornia at28percent.Very concernedthat cross-bordertransmissionlinecouldundermine employment opportunities in(Imperial) County.April2011CA State Asso. of ElectricalWorkers resolution:opposes construction ofcross-border transmission linesfromMexico into California and strongly condemns recentactions in Mexico to crush the Mexican electrician’sunion.3CFE(Mexico) border power plant assumption 2003–another 600 MW Sempra plant in Mexicalisource: Florencio AboytesPhD –CFE,CFEGeneration and Transmission Expansion PlanBajaCalifornia System 2003-2007,March 2003., p. 14.5Original SDG&E transmission plan –border to LABasin interconnectionsource: D. KorinekSDG&E direct testimony,R.01-10-024Valley-Rainbow TransmissionLineProceeding, April 15, 2003.6Sempraon advantagesof BajaCaliforniasource:Gas Turbine World, ,Sempra Energy–MexicaliPlant Spurs Surge of Capacity,March-April 2004.“Advantages for Mexican programs include:”“Availability oflow costlabor.”“Avoidingsome of the stringentenvironmentalrules fornew U.S.facilities.”“Anotheroverridingfactor is that underMexicanregulationspermitting for a new plant takes only 6-8months,compared withmuch longer periods –usuallytwice that –to gainapprovalsfor U.S. projects.”Sempra vision –energy maquiladoras.7InterGen gives in, unplugs turbinesource:San Diego Union Tribune,InterGen gives in, unplugs turbine,January 17, 2004.“InterGenhas shut down one generatingunit at itsMexicali power plant.”“InterGenmisled thegovernment into believing that bothof the plant'sexport turbineswere fitted with pollutioncontrol devices.”“Environmentalists recently discovered thatIntergenhadnot fitted one of the turbineunits with the SelectiveCatalytic Reduction technology, SCRs,forNOxcontrol.”“Officials in Imperial County, concernedabout emissionsfrom both the InterGenand Sempra plants, also believedthe InterGenunit was equippedwith scrubbers.”8Gaming the system, border stylesources: 1) press release,Sempra EnergyReaches Agreement ToSettleEnergy Crisis Class-Action Litigation, January 4, 2006(http://investor.shareholder.com/sre/releasedetail.cfm?releaseid=183120);2) CA Dept. of Water Resources press release,DWR Awardedmore than $70MillioninDispute with Sempra Energy-Arbitration Panel Rules Sempra Energy Acted in Bad Faith and in Breach ofMultiple Aspects of itsLong-Term Energy Contract with DWR, April 21, 2006 (http://www.water.ca.gov/news/newsreleases/2006/042106sempra.pdf);3) SanDiego Union Tribune,SDG&E set to pay after misstating Sunrise info, March 7, 2009.January 2006: Sempra $350 million Continental Forgesettlement –ricochet natural gas trades toCFE Rosarito,Baja Californiapower plant drive up SoCal natural gasprices during 2001 energy crisis.April 2006: Sempra $70 million fine for violating terms of10-yearelectricity contract with state, includesSempraMexicali plant.March 2009: $1.1 million settlement, SDG&EmisleadingCalifornia utilitycommissioners on viability ofsouthernroute for Sunrise Powerlinktransmission line. $200,000allocatedfor ethics trainingfor seniorexecutives.9Sempra’sborder doubts –end of 10-yearstateelectricity contract, low natural gas prices hurtLNGsources: 1) Sempra contractwithDWR:http://www.cers.water.ca.gov//pdf_files/power_contracts/sempra/050401_sempra_ppa.pdf,pdf.p. 31; 2) Jakarta Post,Appropriate sale price forTangguhLNG is imperative, June 18,2007.Sempra’s 10-year, $7 billion electricity supply contractwith state of Californiaends in September2011.Mexicali power plant will have no captive buyer whenstate contract ends. What to do with the Mexicaliplant?Sempra buys LNG from BPTangguh(Indonesia)for ~$6per million Btuunder 20-year contract.Shale gas has dropped U.S.domestic natural gas priceto ~$4 per millionBtu –low domesticprices expectedforforeseeable future.What to do with the Costa Azul LNG terminal?10Half court shot –Sempra’s Costa Azul LNG becomesregional natural gas-fired powerplant energy hubsource: CaliforniaEnergy Commission,Comparative Analysis of Future GasandElectric InfrastructureOptionsintheCalifornia/Mexico BorderRegion,October 2008, Figure 6.11Environmental impacts of export energydevelopment in BajaCaliforniasource:B. Powers,San DiegoSmart Energy 2020, October2007, AttachmentC. See:http://www.etechinternational.org/new_pdfs/smartenergy/52008_SmE2020_2nd.pdf.Costa Azul LNG terminal:Greenhouse gas burden ofLNG imports is ~25 percent higherthan domestic natural gas.BP Tangguhraw field gas is rich in CO2which is ventedtoatmosphere at the liquefactionplant.Liquefaction and shippingofLNG are energy intensive.SeawaterLNGre-heat system at Costa Azuluses largeamountsofseawater in once-through heating system.Mexicali export power plants:Noair emissionoffsetsrequiredon Mexico sideofborder, despitepoor air quality in Imperial County and Mexicali.Norequirementto report results of continuousemissionsmonitoring.12Sempra’s EnergíaSierra Juárez(ESJ) windproposal–live or memorex?Source: California Energy Markets,Mexico Could Be Wind Hotspot IfWires, Border IssuesAreSolved, June 17, 2008.Mexicanrenewablesare ineligiblefor U.S. tax credits,which for wind equateto about3 cents/kWh in value.La Rumorosa(Energía Sierra Juárez) developers havequoted wind capacity factorsof30 percent compared tothe 35 to 40 percent touted by U.S. wind companies.The($2 billion SDG&E)Sunrise Powerlink orsome othertransmission solution would be required tomoveLaRumorosa wind toload centers.SDG&E has appliedto contract for 450 MW of peakinggas turbines, a~$500 million investment, toaddress (inpart) the intermittency of wind power.13Sempra as gatekeeper forexport ofrenewable energyfrom Baja California to California –ESJ “generator tie”source: U.S. DOE,EnergíaSierra JuarezTransmissionLine Project –Scoping Report,September2009, Figure 2.14Distributed solar PV and ESJ wind cost about same –no reasonto payfor transmissionand gasturbinessources: 1) San Diego Union Tribune,SDG&E buying power from Mexican wind farm, April 19, 2011;2) RenewableEnergy TransmissionInitiative,RETI Phase 2B Final Report, May 2010, p. 4-8 (PV at $135/MWh,see:http://www.energy.ca.gov/2010publications/RETI1000-2010-002/RETI-1000-2010-002-F.PDF);3) B. Powers -confidential 10 MWPV project, May 2011,$120/MWhbid price.Estimated long-term contract price between Sempra andSDG&E for up to 156MW of ESJ windpower:$120permegawatt-hour.Estimate cost of electricity productionfrom 10 to 20 MWsolar PVarray atsubstation near SanDiego: $120 to$140 per megawatt-hour.Solar PV is reliablyavailableon hot summer afternoonswhen electricity demand, and cost ofpower, is highest.Wind productionin San Diego area is lowest in summer,and lowest on 24-hour basis during mid-day.15Output of solar PV systems on hot summer dayssource: RenewableEnergy TransmissionInitiative,RETI Phase1B FinalReport,January 2009, p. 6-23.16Output of San Diego areawind on hot summerdayssource: 1) U.S. DOE, Energy InformationAdministration, 2008 Form 923 Monthly TimeSeries, 50 MW KumeyaayWindProject, 2)San Diego Regional RenewableEnergy Study Group,Potential for RenewableEnergy in the San Diego Region –Chapter 4: Wind, August 2005.Month-to-month 2008wind energySDG&E Summer Load Profileproduction,50 MW Kumeyaaywind(blue) and Summer WindProfileproject (Campo, CA)(purple)17California moving away from mega-scaleremoterenewable energy projects tolocal projectssources: Clean Energy Jobs Plan -http://www.jerrybrown.org/sites/default/files/6-15%20Clean_Energy%20Plan.pdf,SDG&E May9, 2011 presentation:http://www.energy.ca.gov/2011_energypolicy/documents/index.html#05092011.California Gov.Jerry Brown “Clean Energy Jobs Plan” –local renewableenergy focus.12,000 MWoflocal renewable power by2020, outof20,000 MWtarget.Proposed allocation of2,000 MWoflocal renewablepower forSan Diego.SDG&Easserts that 2,000 MWof local solar productioncould result in San Diegohaving too much solar power onsome days, requiring some export ofsolar power.18Too manyprojectsaregoing on undeveloped landsinboth countries, not retired aglandsor brownfieldssource of photos: B. Powers and Solar Done Right website:http://solar.ehclients.com/images/uploads/env_impacts_of_lg-scale_solar_projects.pdf191,000 MWSolar MilleniumBlythe Solar –disturbed agland alternative is feasible, ARRA deadline is hurdleSept 2010CEC Decision:http://www.energy.ca.gov/2010publications/CEC-800-2010-009/CEC-800-2010-009-CMF.PDFBlythe MesaAlternativewould include a 1,000MWsolar facilityon threenoncontiguous areastotalingapproximately 6,200 acres.Blythe MesaAlternative ispotentially feasible andmeets all but one of theproject objectives.Private parcel acquisitionwould likelynotoccurquickly enoughtocompletepermitting in2010 to qualifyfor ARRAfunding.201,000 MW Solar MilleniumBlytheSolar will disturb7,000acres ofundisturbed public land-nearly size ofDCsources: photo of Washington, DC –Google Earth; 7,000 acres of disturbed land -California Energy Commission, Blythe Solar Projectwebpage:http://www.energy.ca.gov/sitingcases/solar_millennium_blythe/index.html21550 MW Desert Sunlight in shadow of Joshua TreeNational Park –too big and too closeAugust 2010 BLM DEIS:http://www.blm.gov/ca/st/en/fo/palmsprings/Solar_Projects/Desert_Sunlight.htmlDecember 2010CEC Decision:http://www.energy.ca.gov/2010publications/CEC-800-2010-010/CEC-800-2010-010-CMF.PDFProject site surroundedonthreesides by Joshua TreeNPDisturbed agricultural land nearby in Desert Center (photo)Largeproject not appropriateon borderof national park22Recommended guidanceto Departmentof Interiorfor use in prioritizing 2011 projectssource: California Desert & Renewable EnergyWorkingGroup,Recommendationsto Secretary of the Interior Ken Salazar on Ways toImprovePlanning and Permitting forthe Next Generation of Solar Energy Projects on BLMLand in the California Desert,December 22,2010#1 Low Conflict Areas: timely or expedited permitting/probable permit approvalMechanicallydisturbed landssuch as fallowedagriculturallands.Brownfields, idle orunderutilizedindustrial areas.Locations adjacent tourbanizedareas and/or loadcenters whereedge effectscan be minimized.Locations thatminimizetheneed tobuildnew roads.Meets oneor more of the followingtransmission sub-criteria:transmission with existing capacityand substationsis alreadyavailable; minimal additional infrastructurewould benecessary,such as incremental transmission re-conductoringor upgrades,anddevelopment ofsubstations;new transmissionline onlyifpermittedand no legalchallenges.23Signers of December 2010 recommended guidance:who’s whoofutilities, solar developers, NGOsLisa Belenky,Center forBiologicalDiversityDarren Bouton,First Solar,Inc.Barbara Boyle,Sierra ClubLaura Crane,The Nature ConservancyKim Delfino,Defenders ofWildlifeShannon Eddy,Large-scale Solar AssociationSean Gallagher,TesseraSolarArthur Haubenstock,BrightSourceEnergyRachel McMahon,Solar MillenniumMichael Mantell,Chair, CaliforniaDesert & RenewableEnergyWorking GroupWendy Pulling,Pacific Gas& ElectricJohanna Wald,Natural Resources Defense CouncilPeter Weiner,Solar industryattorneyV. JohnWhite,Center forEnergy Efficiency & RenewableTechnologies24EPA’s “RE-Powering America's Land” initiativesee:http://www.epa.gov/renewableenergyland/; photo: PVonformerlandfill, Ft.Collins, CO.SitingRenewable Energy onPotentially ContaminatedLandand MineSitesEPA is encouraging renewableenergy developmenton currentand formerlycontaminated landand mine sites.EPA wouldbe theappropriateleadfederal entity to designate“lowconflict area” sites for utilityscale solar projects.Dept.of Interior/BLM isnot theappropriate entity,as many ofthese lowconflict sites are not onBLM land.25Conclusion: U.S.–Mexico border region should notbe an energyexport zoneBorderis used by U.S. energycompanies:As a shieldfromU.S. regulatory oversight whilegainingfullaccess to U.S. market.To avoid U.S.-level environmentalcompliancewhilegainingfullaccess to U.S. market.To avoid paying U.S.labor rates,or contributingjobsto the U.S.economy,whileprimarilyor exclusivelyexportingto U.S.market.Mexico absorbs high environmental impact whilegaininglittle in terms of economicdevelopment.The disadvantagesof using the U.S.-Mexico borderregion as an energy export zone outweightheadvantages for both the U.S.and Mexico.26