DOE Should Deny Mexico Pacific's LNG Permit Extension Request

Strategic Insights -

The US Department of Energy (DOE) is considering a permit extension request from Mexico Pacific, the developer of the proposed $15 billion LNG terminal in Mexico's Gulf of California. The terminal, called Saguaro, has a long history of controversy due to its potential impact on the region's unique and sensitive ecosystem. Despite Mexico Pacific's claims of "good cause" for the delay, the company's own actions and poor decisions have consistently "stymied" the project's progress.

Key Takeaways:

  • Mexico Pacific's original permit was for seven years, which is about to expire, and the company is now seeking a 12- to 18-month extension, but has now requested a seven-year extension, equal to its original permit term.
  • The company claims that "circumstances completely outside of its control" are responsible for the delay, but fails to demonstrate a factual connection between cited external events and its own permit noncompliance.
  • Mexico Pacific has a history of decision-making to circumvent meaningful environmental review of the Saguaro project, including converting the original permit from a re-gasification project to a liquefaction terminal for export without conducting a new environmental review.
  • The company has ignored the unacceptable location of the terminal in a region globally recognized as a sanctuary of rare biodiversity, resulting in unacceptable risks to protected species and their habitat.
  • Other LNG projects in Mexico have advanced in compliance with their permit obligations, demonstrating that Mexico Pacific's delays are not due to external events.
  • The company has failed to acknowledge the unique risks posed by the Saguaro project and has not provided any specific facts demonstrating that external events have interfered with its progress or permit compliance.

Statistics:

  • $15 billion: The estimated cost of the proposed Saguaro LNG terminal.
  • 12-18 months: The initial time period for which Mexico Pacific first requested an extension of the permit.
  • 7 years: The time period for which Mexico Pacific originally received a permit to export US natural gas.
  • $300 million: The amount allegedly spent by Mexico Pacific so far on the project.
  • 2021: The year in which Mexico Pacific first promised to make a final investment decision on the project.
  • 2025: The year in which construction on the project stopped due to a preliminary injunction issued by the Mexican courts.
  • 2006: The year in which the original permit for the re-gasification project was issued.
  • 5 cases: The number of lawsuits currently pending against the Saguaro project in Mexico.

Sources:

  • Natural Resources Defense Council (NRDC)
  • Centro Mexicano de Derecho Ambiental
  • Earthjustice
  • Public Citizen
  • Sierra Club
  • US Department of Energy (DOE)
  • Mexico Pacific
  • Quantum Capital Group
  • Sempra Energy
  • New Fortress Energy