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Sempra Impasse in Ensenada Raises Questions

Sempra Impasse in Ensenada Raises Questions
The temporary shutdown of Sempra Energy's natural gas plant in Ensenada last month has raised many questions. Among them, the future of American investment in Mexican border states.

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.