BHP and Woodside are locked in costly and
very time-consuming battles to try to convince California that LNG terminals won’t
destroy the planet – or at least the view from ocean-front homes. In the
process, they are ignoring some interesting advice from former BHP CEO Paul
Anderson to go Mexican.

California invented the not-in-my-backyard syndrome and it’s applying it in
spades with its plan for an LNG terminal that’s required for the state to get the
gas it needs. An on-shore terminal is out of the question, leaving BHP and
Woodside proposing various costly alternatives many kilometres offshore and
then piping the gas to the Terminator State.

The latest instalment in the saga is
Woodside reportedly coming up with an even more costly proposal than BHP. The Smagereports:

Detailing the proposal yesterday,
Woodside’s natural gas president, Jane Cutler, declined to release even a rough
estimate of the plan’s costs.

Woodside’s plan could cost more
than BHP’s $US800 million ($1.08 billion) bid to build an offshore floating
terminal because its technology is more complicated.

Ms Cutler would only say that,
using conservative US natural gas price forecasts, Woodside’s
proposal was “potentially commercial”.

The very interesting and quite reasonable
tip from Paul Anderson in a Eureka Report interview
last year was that the way to solve the Californian NIMBY problem was simply to
travel south of the border, down Mexico
way.

There are countless miles of Baja California
coastline with no houses to have their view spoiled and Mexico is
keen to encourage industrial investment. Then it would just be a matter of
piping the gas north, all at a considerable saving to shareholders.

One must wonder why the Australian
companies are not pursuing the option. Does it say something about their
perception of Mexico’s sovereign risk, or do they not know how to speak Spanish? Given
BHP’s Escondida operation in Chile at
least, it shouldn’t be the latter.

Peter Fray

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