Sempra Energy (SRE)

[tp2rla]

Gas Attack
by Seth Lubove
No good deed goes unpunished for a utility trying to deliver cheaper energy to its customers.
Back in 2001, when gas was relatively cheap and plentiful, Stephen Baum sounded alarm bells that the nation was facing an impending shortage of natural gas. His prediction was on the mark. The spot market price for gas in southern California has climbed from less than $3 per million British thermal units in 2001 to just shy of $7 now.

But instead of applause Baum is getting scorched, turning into the poster boy for angry environmentalists. His crime: As chief executive officer of Sempra Energy, the San Diego gas and electric utility holding company, he's building an $800 million terminal for liquefied natural gas in Mexico to export to southern California to make up for the gas shortage. (Sempra is also building terminals in Texas and Louisiana at $700 million each.)

Greenpeace, which has staged a protest outside Sempra's headquarters, says the company is pitching "dirty energy." Other enviro-protest groups, such as the Utility Reform Network and Ratepayers for Affordable Clean Energy, accuse Sempra of "promoting further dependence on foreign fossil fuels." The Save the Waves Coalition declares that Sempra's planned LNG facility, 56 miles south of the border in Baja California, will ruin a "world-class wave known as Harry's" and wipe out lobster and tuna.

"Give me one hour under oath with these guys and they're either going to retract a lot of this stuff or play shuffleboard in a white-collar prison," warns William Powers, the self-employed advocate behind the Border Power Plant Working Group, which cautions that Sempra's and other proposed LNG terminals place "existing communities at risk."

Baum sees a hidden agenda behind the complaints. The longer LNG opponents can delay imports, the more expensive domestic sources of gas become. Which in turn will make the price of wind power, solar, geothermal, biomass and other costly green energy schemes look reasonable. "One hand washes the other," says Baum.