The U.S.-Mexican border is one of the most dynamic international regions in the world. It is almost 2,000 miles long, stretching from the San Diego-Tijuana region on the Pacific Ocean to the Brownsville-Matamoros region on the Gulf of Mexico. The population of this border area is over 10 million with about 45% residing in San Diego-Baja California region. The border crossing between these two cities is the busiest in the world.
An adequate supply of energy at reasonable cost is crucial to the quality of life and economic development of the border region. The use of energy, however, invariably carries with it environmental consequences. The production, distribution, and consumption of energy affects the environment through its impact on air quality, surface and groundwater contamination, discharge of waste heat into surrounding bodies of water, toxic waste disposal (including radioactive materials), and land use.
Energy-related activities on one side of the border have environmental consequences on the other side of the international boundary. For example, in the El Paso-Ciudad Juárez region of the border, the air basin is shared by both cities and both cities must cooperate to reduce air pollution. Much of the air pollution in this region originates from the industrial and transportation sectors, both large users of energy, on both sides of the border.
To address many of the technical and policy issues related to the use of energy and its environmental impacts in the border region, particularly the California-Baja California portion, San Diego State University's Institute for Regional Studies of the Californias and the Center for Energy Studies assembled specialists from the private sector, government agencies, and academia from the United States and Mexico for a one day workshop in June 1994. The following is a summary of the contents of the workshop with additional and updated information included.
Some of the relevant agencies that regulate the energy sector in the United States are the Federal Energy Regulatory Commission (FERC), the Department of Energy (DOE), the Nuclear Regulatory Commission (NRC), and individual state public utilities commissions that set electric and natural gas rates. In California, the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) are the principal agencies charged with regulating the energy sector. At the local level, city and county jurisdictions may have to grant approval for energy related construction such as gas pipelines and power transmission lines. In San Diego, planning agencies such as the San Diego Association of Governments (SANDAG) also play an important role in long range energy planning.
The Mexican energy sector is structured very differently from that of the United States. The production, distribution, and management of energy supplies in Mexico is under control of the federal government. The Secretaría de Energía, Minas e Industria Paraestatal (SEMIP) (as of December 1994, called Secretaría de Energía) is the key government ministry responsible for formulating energy policies. The Secretaría de Energía has direct oversight of the Comisión Federal de Electricidad (CFE, the national electric utility), Petróleos Mexicanos (PEMEX, the state-run oil monopoly), the Comisión Nacional Para el Ahorro de Energía (CONAE, the national energy conservation commission), and several energy related research institutes. Currently, there are no large-scale energy related activities within the private sector. This situation will change in the future with the implementation of North American Free Trade Agreement (NAFTA), and as trends underway within Mexico to diminish the federal government's role in the energy sector advance.
Energy resources, and production and consumption patterns are also quite different in the United States and Mexico. Although the United States currently imports about half of its supply of oil, it is a major producer and consumer of coal and natural gas. In 1993, the United States exported 75 million short tons, or 8% of its coal production, and imported (mostly from Canada) 2.26 trillion cubic feet of natural gas, 11% of consumption. In addition to the three primary fossil fuels (oil, natural gas, and coal), which account for 90% of U.S. consumption. United States energy supplies also consist of nuclear and hydroelectric sources.
Mexico, in contrast, derives most of its energy from oil and natural gas and its energy resources are not as diverse as those of the United States It is, however, a significant producer and exporter of petroleum and has large reserves of natural gas. For the first seven months of 1993, Mexico exported 1.33 million barrels of oil per day, with 64% going to the United States. Mexican proven reserves of natural gas are estimated at about 73 trillion cubic feet.
In the area of electric generation, there are also significant differences between the United States and Mexico. The United States used domestic coal to generate 55% of its electricity in 1993, while in 1990 oil accounted for the major portion of power generation, in Mexico, or 54%.
Baja California is not connected to the Mexican national electric grid system. Also it does not have a natural gas pipeline system. It depends for its energy supplies on the large geothermal fields at Cerro Prieto, south of Mexicali, and petroleum products imported from distant regions in Mexico. Although not part of the Mexican power grid system, Baja California is connected to the San Diego Gas & Electric Company's system and is part of the North American grid network. The geothermal fields, with a current installed capacity of 620 MW, supply 220 MW to California, mostly to San Diego. These exports represent 29% of electricity generation in Baja California and account for 10% of SDG&E's supply. CFE earned US$85.6 million from these exports in 1992. The contracts governing these transfers expire in August 1996.
There are important differences, as well as similarities, between San Diego and Baja California. Geographically, San Diego is located relatively far from the main energy resources in the United States. In 1991 the sources of San Diego's energy were: oil (48%), natural gas (33%), nuclear (10%), purchased power (10%), and renewables (less than 1%). Virtually all of this energy is imported into the region via gas pipelines, oil trucks, and power transmission lines. Although San Diego's energy sources are more diverse than those of Baja California, it is more dependent on out-of-region supplies. Besides importing all of its petroleum products and natural gas, San Diego imports 57% of its electricity, including 10% from Baja California. Consumption by sector for San Diego for 1991 was 54% transportation, 21% residential, 15% commercial, and 5% industrial. The cost of this energy was about US$3 billion, representing about 5% of San Diego's gross regional product.
The sources of Baja California's energy in 1991 were: fuel oil (36%), leaded gasoline (22%), geothermal (13%), unleaded gasoline (12%), diesel (12%), and LPG (5%).
Baja California has an installed capacity of 1,420 megawatts (MW) consisting of: geothermal (44%), fuel-oil based thermal plants (44%), and gas turbines which use fuel oil (12%).
Baseload generation is mostly supplied by the geothermal plants which account for 71% of Baja California's electricity. Peak load generation comes from the fuel oil plants, mostly the large plant near Rosarito, and accounts for 28% of electricity generated. Final consumption of energy in Baja California is divided as follows: transportation (54%), industrial (28%), residential/commercial (15%) and agriculture (3.5%).
The demand for electricity in Baja California grew at twice the rate as the national average between 1982 and 1992, reflecting economic growth in the region, largely owing to the expansion of the maquiladora industry. Between 1982 and 1988, growth rates in electricity demand averaged 8% per year, and between 1988 and 1990 were above 10% per year. However, between 1990 and 1992, growth rates dropped dramatically to less than 4% per year due to the economic downturn in Mexico.
Baja California has the highest average consumption per residential customer in all of Mexico. The residential sector accounts for 39% of electricity consumed in Baja California, well above the national average of 22%. The causes of this abnormally high consumption are (a) the widespread utilization of inefficient used household appliances coming from the United States, a phenomenon that occurs all along the Mexican northern border, (b) the poor insulating quality of building materials used in Baja California and the very high temperatures in the Mexicali region.
The price of electricity in Mexico varies widely depending on the type of customer. The Mexican government removed most electricity subsidies after 1982 and electricity rates have been rising since then. The most expensive rates are charged to municipalities which pay $0.14 per kilowatt-hour (kWh) for street lighting and commercial users who pay $ 0.13 per kWh. Those rates are comparable, if not higher, to similar categories in San Diego. Agricultural and residential customers are still subsidized in Mexico, with agricultural users paying about $0.03 per kWh. Residential customers pay, on average, about $0.05 per kWh, depending on consumption levels. The price increases with consumption, rising from $0.015 per kWh for the first 25 kWh to $0.14 per kWh for consumption above 1,000 kWh for places like Mexicali.
Residential customers in Baja California have higher levels of consumption and therefore spend much more for electricity than customers in other parts of Mexico. Mexicali and Tijuana residents pay about 4.5 and 2.3 times the national average, respectively. In Mexicali, a high percentage of households pays more than 10% of their annual income on electricity.
Air pollution generally originates from point and area sources. Point sources, such as power plants, industrial facilities, and smelters, are sources that put over 100 tons per facility per year of pollutants into the atmosphere. Area sources are emissions spread out over a large area and come mostly from automobiles, trucks, light industrial operations, and commercial and personal activities.
Motor vehicle emissions are a significant source of air pollution in the border region. Over 50% of volatile organic compounds (VOC), precursors to smog formation, and 70% of NOx emissions come from the transportation sector in San Diego. Transportation is the largest energy consuming sector as well as the largest polluter.
A joint SEDUE-EPA study done in 1990 in Ciudad Juárez showed that the combustion efficiency of the average vehicle was equivalent to the early- to mid-1970 American level. Inefficient fuel combustion results in high emissions of VOC, nitrogen oxides, carbon monoxide, and particulate matter. Although no similar data yet exist for Tijuana, it is likely that the situation is similar to that in Ciudad Juárez.
For point sources of emissions, power plants are a major source of pollution but switching from heavy fuel oil to natural gas can greatly improve air quality. SDG&E has converted all its furnaces to natural gas which has resulted in a large decrease in NOx emissions for the region. From a level of over 10,000 tons per year in 1979, emissions were reduced to 2,000 tons per year in 1991.
In Baja California, the use of fuel oil to meet peak power demands gives rise to the release of large amounts of ozone precursors, NOx, and hydrocarbons. Peak demand usually occurs in the afternoons on hot summer days, thereby increasing ozone formation.
Other sources of air pollution arise from the burning of non-traditional fuels in the winter by many residences in the Mexican border area. Fuels such as wood scraps, cardboard, and tires emit large quantities of particulate matter and carbon monoxide. This is particularly a severe problem in the El Paso-Ciudad Juárez area.
As a result of the 1983 La Paz Agreement on border environmental issues, Mexico's SEDUE (now Secretaría del Medio Ambiente y Recursos Naturales or SEMARNAT), the USEPA, and Tijuana's Instituto Tecnológico (ITT), began a program in 1986 to monitor heavy metals at six sites in Tijuana. Building on that successful cooperation, in 1992 an automated air monitoring station was set up at the campus of ITT for measuring sulfur and nitrogen oxides, carbon monoxide, and ozone concentrations. The station has been in continuous operation since April 1992, except for a brief period to allow for installation of newer equipment. Data from this station should be available in the near future.
Prevailing wind patterns in the border region are an important aspect of transboundary transport of pollutants. For the San Diego-Tijuana region, few data are available about wind patterns. What information there is indicates that wind patterns are primarily from northwest to southeast for most of the year. This implies pollutant transport from the Los Angeles and San Diego region to Mexico. For a short period of time during the winter nighttime hours, wind patterns may be reversed, resulting in pollutants produced in Tijuana being transported to the San Diego region. It should be stressed, however, that sufficient data are not available to determine, with any degree of certainty, quantitative levels of cross-border pollutant transport in the San Diego-Tijuana region. Much more work needs to be done in this area.
The CFE has developed a program called PAESE (Energy Conservation Program for the Electric Sector) directed at saving energy in the residential, commercial, industrial, public services, and agricultural sectors for Baja California. The residential sector accounts for 89% of CFE's customers and consumes 38% of the electricity. In Mexicali, 91% of total customers are in the residential sector and account for 47% of consumption. It is thus clear that energy savings in the residential sector will have a large impact on overall savings.
Working with the Universidad Autónoma de Baja California (UABC) in Mexicali, CFE began a pilot project to determine potential savings from insulating walls and roofs in selected houses that use large amounts of energy for air conditioning. Tests showed that proper insulation can reduce heat loss by 60%, resulting in a 30% reduction of electricity usage, and a 30% reduction in electric bills.
On the basis of these results, CFE began a large scale program to retrofit residential houses with insulation. Financing is provided through direct loans to customers, paid back in 36 months without finance charges. The program has been in operation for three years and has resulted in insulation being installed in 33,000 homes. This program is now serving as a model for other parts of Mexico with similar climate conditions. CFE is also participating in discussions to develop building standards for insulation and construction as well as setting efficiency requirements for air-conditioners, refrigerators, and electric motors.
Other CFE programs directed at reducing electricity demand are: IDEAA, which provides customer rebates to allow automatic interrupts of air-conditioners during peak hours; Plan Nivelado divides electric bills into 12 equal payments enabling better financial planning for customers; and forestation programs to provide shading and appropriate landscaping to reduce energy consumption.
In San Diego, SDG&E has been engaged in demand side management (DSM) programs for some years. These programs are mandated by the California Public Utilities Commission (CPUC) and are paid for by the ratepayers. The underlying philosophy is that investment in energy savings devices and programs will result in reduced demand, thereby diminishing the need for new capacity and resulting in lower rates in the future. Some of SDG&E's DSM programs are: subsidies for purchases of compact fluorescent light bulbs, customer rebates for purchase of energy efficient appliances such as refrigerators and air-conditioners, home energy audits, and information about ways to save energy in the home. In 1992, SDG&E spent $44.6 million on DSM programs.
Another interesting program in San Diego is a U.S. Department of Energy (DOE) funded project based at SDSU's Energy Engineering Institute. The purpose of the project is to conduct detailed energy audits of medium to large commercial and industrial companies and to recommend specific ways to save energy. Audit teams spend one or two days visiting the company and collecting information about energy use. The team prepares a detailed analysis of ways to use energy more efficiently and what cost savings may be anticipated. All audits are done confidentially and only recommendations which result in a payback of three years or less are made. The program has been in operation since 1990, with approximately 100 audits conducted. It is estimated that among the 22 centers, 77 trillion british thermal units (Btu) of energy worth $420 million has been saved as a result of this program. Discussions are underway to see if it is possible to extend the program to the Mexican side of the border.
In the San Diego region, several local and state agencies are involved in regional energy planning. In the electric sector, the California Energy Commission (CEC) is required to prepare a biannual electricity report in which future electric demand is forecast for the state as a whole. As part of this process, electricity demand for the San Diego region is determined by SDG&E and the CEC. The process of determining future demand involves public hearings over a two year period. The purpose of these hearings is to ensure that the forecasts reflect the interests of the main stakeholders in the region, such as the ratepayers, the local utility, and local governments. This interactive process appears to have resulted in realistic forecasts for San Diego and California. The models used to forecast demand, however, are highly sophisticated and complex and, for the most part, not easily available to members of the general public.
Once future demand is determined by the CEC, the forecasts become the basis for planning in the electric sector. Generally, both the utility and the CEC opt for the least cost alternative to meet demand. This usually consists (in increasing order of cost) of demand side management, on-site cogeneration, out-of-region power purchases, and in-region generation.
Another very important state agency in California is the California Public Utilities Commission (CPUC). Although the CPUC does not participate directly in forecasting electric demand, it regulates the entire industry by setting the rates that utilities can charge its customers. In recent years, the CPUC has opened up the electric sector to more competition, which may result in allowing more than one company to provide electric service within a given territory in the future. Should this occur, the entire nature of how electricity is produced, distributed, and consumed will change substantially. A competitive electric market in California could also impact Mexico. This is so because it might be possible for independent power producers to produce power in the United States and sell it to Mexican customers in competition with both CFE and the local United States-based public utility. Similarly, United States, as well as Mexican independent power producers may generate power in Mexico to sell to customers on the United States side of the border.
An important new analytical tool that is currently being used in regional energy planning is PLACE³S (PLAanning for Community Energy, Environmental and Economic Sustainability.) This innovative program is an interactive system based on geographical information systems and spreadsheets that allow regional planners to determine the energy consequences of decisions related to land use, facilities siting, transportation routes, and layout of new developments. It is a very powerful tool that is likely to find increasing use by local authorities in the future.
Gas production rate is about 0.12 cf LFG (landfill gas) per year per pound, 40% methane gas content. This translates to an energy production of about 10MMBtu/hr and a power production of 560 to 800 kw, assuming a conversion rate of between 12,000 to 17,000 Btu/kWh. For a 10 million ton in-place landfill, net power would be 5.6 to 8 megas.
Power systems that can operate on landfill gas are reciprocating engines, gas turbines, or boilers with steam turbines. An important factor in the selection of engines for landfill projects is their emissions of NOx. Southern California now requires very low emissions, 0.7 gm/bhp hr, for new engines coming into use.
Typical reciprocating engines are lean burning, 800 kw, 16 cylinder Caterpillar engines. There are about 40 landfill gas installations in operation around the country that utilize reciprocating engines. Gas turbines typically in use are of the low pressure type requiring gas to be supplied at about 185 pounds per square inch gauge (psig). There are about 25 turbines installed in 12 landfill sites. Boiler steam type engines have been operated by the Los Angeles County Sanitation District since the mid 1980s. They have three plants, the largest rated at 50 megas. These boilers operate at atmospheric pressure with gas compression needed only to 5 psig. An important advantage of boiler steam generators is that the landfill gas does not come into contact with any moving parts of the engine, thus extending lifetimes. Comparing the three types of engines, one finds that the reciprocating and gas turbine engines are more economical at lower power, less than 20 megas, but the steam boilers are less polluting in terms of NOx and CO emissions. To date, there are no landfill recovery systems in use in Baja California, but clearly this would be a promising area of energy production because it tackles both the landfill problem and lack of natural gas supplies in Baja California.
CESPT, the state agency that supplies water to Tijuana, has proposed an interesting mechanism to finance the project. The successful bidder will purchase a 98% interest in a private company, established by CESPT, called Energía del Agua, S.A. (EASA), which will finance, own, and operate the hydro plant. During an agreed upon period, EASA will operate the plant to allow for recovery of investment and to cover costs of operation. CESPT will pay the company an accorded percentage of the savings obtained by reducing power purchases from CFE. After the established period, full ownership of the company (EASA) will revert to CESPT. In this way, the contractor can be assured of a return on his investment within some period of time and CESPT reduces its costs for supplying water to Tijuana.
Under a program sponsored by the Autonomous University of Baja California (UABC) in Mexicali and funded by a loan from the Canadian government, microhydrolectric technology will be used to tap the energy potential of the irrigation system in the valley of Mexicali. Power generated from the canals would be used by UABC to meet a large part of its electrical demand, about 5 MW. The irrigation system itself consists of 349 km of main canals and 1,880 km of smaller, tributary canals. The total potential power available from the irrigation canal system in the valley is about 10 MW. Innovative use of already existing irrigation infrastructure to generate electricity, such as this program in Mexicali, could be applicable in other regions where intensive agriculture exists.
As noted earlier, 80% of Baja California's electricity is supplied by Cerro Prieto (equivalent to 9.6 million barrels of oil per year) with about 1.6 million MWh being exported to California.
Renewable and indigenous energy resources in Baja California are mainly solar, wind, biomass, and geothermal. Energy potential for various resources are estimated to be the following: geothermal (1,000 MW proven reserves), solar (3.3-6.9 kWh/m2), wind (100-250 W/m2), microhydroelectric (80 MW), and tidal power (1,200 MW).
To deal with this serious problem, clearly a binational approach is needed. The Environmental Defense Fund in cooperation with the Paso del Norte Air Quality Task Force-a binational consortium of business leaders, regulators, scientists, and elected officialsÑhas begun a three-year project in an attempt to manage the common airshed. They hope to accomplish this by setting emission limits to healthy levels, establishing common air quality targets, and developing incentive based approaches to reduce emission in the region. If successful, this type of approach could serve as a model for dealing with transboundary pollution in other border regions.
CERI has used an equilibrium gas flow model that includes four new supply regions and ten new demand centers in Mexico. Economic growth and energy prices are the key variables in the analysis, but environmental concerns and PEMEX's budgetary constraints are also important. CERI develops three scenarios: a business as usual scenario, a "North American Tiger" scenario, and a "Muddling Through" scenario. All three scenarios show that natural gas demand will increase in Mexico to support economic growth and to reduce environmental pollution. In most cases, gas flows are from north to south, meaning that Mexico is likely to be a demand center for U.S. and Canadian gas in the future.
Chapter II.1: "Overview of the Energy Sector in the Border Region," by Alan Sweedler.
SCERP project: "Sources of Air Pollution Along the Border: Analysis of Data, Databases, and Information," Alan Sweedler and Paul Ganster, San Diego State University AQ94_7.7.html
Availablity of Energy and Environment in the California-Baja California Border Region published by the Institute for Regional Studies of the Californias.
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Last updated 5/6/99