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Sempra Pushes to Expand Pacific Pipelines for Gas Export

Through a 'tribal justice' front group, the infrastructure arm of
the California and Texas utility owner has lobbied for gas exports that
could raise prices for its own customers.

White House officials, Republicans from gas states, and fossil fuel
lobbyists are teaming up in a push to open the Pacific Coast as a new
frontier for U.S. exports of liquefied natural gas (LNG). The effort
aims to reduce the cost of exporting gas to Asia and lock in the
long-term viability of the industry.

At the heart of the campaign is Sempra Energy, the parent company of
major utilities in Southern California and Texas. Sempra Infrastructure,
a business 70 percent owned by Sempra and led by former Trump energy
secretary Dan Brouillette, is developing gas export terminals on the
Gulf Coast and in Northern Mexico.

New documents reviewed by the

**Prospect** show that Sempra is crusading to expand a network of
pipelines for delivering gas to its export hub in Mexico, and floating
an interstate bond authority to finance the infrastructure.

Joined by the electric utility Dominion Energy and a handful of drilling
companies, Sempra is promoting gas export infrastructure through a front
group, Western States and Tribal Nations (WSTN), that says it aims to
promote "tribal sovereignty through the development of domestic and
global markets for natural gas produced in the Western United States."

But as the

**L.A. Times** has reported
<[link removed]>,
WSTN's primary backers are fossil fuel companies like Sempra, and
county governments in gas-producing states. WSTN is run by HBW
Resources, a Houston-based energy lobbying firm. It was founded by
Andrew Browning, a partner at HBW Resources who was President Bill
Clinton's special assistant at the Energy Department's Office of
Fossil Energy.

The pipeline expansions Sempra Infrastructure is promoting would siphon
more gas away from the U.S. at a time when home heating costs have been
volatile. Gas prices for Californians spiked repeatedly
<[link removed]>
over the past year during an unusually rainy and cold winter.

One big winner of higher-cost American LNG would be Sempra, whose
customers in Southern California could face higher gas bills, further
boosting Sempra's recent record profits
<[link removed]>. To
make the case for more exports, Sempra is using social justice language,
arguing that exported gas benefits tribes and could be marketed as an
"ESG" product.

WESTERN DRILLERS AND GAS-STATE POLITICIANS have long sought a direct
route to ship gas to Asia. Japan and South Korea, the world's second-
and third-biggest importers of LNG, are eager to buy more of the fuel,
and are vying to serve as export hubs for distribution to neighbors.

Drillers in the oil patches of the Rocky Mountains and Great Plains
produce both oil and natural gas from their wells, but often need
pipeline capacity to ship the gas to market. The oil and gas industry
has lacked the political foothold in liberal states along the West Coast
to bulldoze pipelines from the Rockies to the coastline. The developer
of a major natural gas project in Jordan Cove, Oregon, quit in 2021
after sustained opposition.

Beyond concerns about climate change, opposition stems from the
potential health hazards. Areas around export hubs in Texas's Corpus
Christi and Galveston have shown elevated rates of asthma and cancer.
One gas terminal near Houston recently suffered a fiery explosion of
compressed methane
<[link removed]>.
Given opposition to building LNG export infrastructure in California,
Oregon, Washington, and British Columbia, which could theoretically
receive piped gas from Alberta, Sempra has looked south of its San Diego
headquarters to Baja California.

WSTN counts three tribes among its members. Tribal governments have been
divided over the question of whether to pursue fossil fuel development.
While many climate campaigns have been led by Indigenous activists, a
long history of lucrative fossil fuel extraction on tribal lands makes
some tribal leaders argue for sustained production.

In December, WSTN held a forum
<[link removed]>
to encourage new gas export infrastructure on the West Coast. Emails and
conference materials reviewed by the

**Prospect** shed light on Sempra's strategy to overcome permitting
and financing hurdles to pipeline build-out.

The documents were obtained by the Energy and Policy Institute, a San
Francisco watchdog that monitors fossil fuel companies and utilities.
They include detailed planning for the second day of the WSTN forum,
which was invitation-only and closed to the press.

[link removed]

Emails show that Jim Diemer, Sempra Infrastructure's director of
midstream (i.e., pipeline) development, joined other LNG boosters on a
panel focused on moving more gas from the Rockies to overseas markets.
In the slide deck prepared by Diemer and others, bullet points and a map
of gas pipeline routes reveal long-range ambitions for new export
infrastructure.

In an email, a panel member stressed the importance of access to
multiple gas basins, including "Green River, Piceance, Uinta, San Juan,
Permian, more remotely Powder, DJ Basins and Marcellus." Those options
are crucial, the slideshow
<[link removed]>
explains, "to provide for supply diversity and ESG optionality."

Boosters of natural gas argue that it is cleaner than coal and will
become more environmentally friendly as it is blended with renewable
fuels. While LNG produces lower carbon dioxide emissions than coal, it
often has a larger greenhouse gas footprint when methane emissions are
taken into account. In emails, Browning emphasized the priority of
getting methane data from LNG companies and suggested engaging Project
Canary, a climate emissions tracking company.

The slide presentation also floats a new "Western Interstate Gas
Authority," potentially to be modeled after an existing bond authority
for municipal gas utilities <[link removed]> in Georgia,
which would issue bonds to finance for pipeline infrastructure.

Diemer strategized ahead of the panel on how to persuade Asian partners
to back the plans. In one email, he wrote, "The only thing I might
highlight further is offtaker participation in midstream/upstream to
vertically integrate participating more broadly in the value chain ... I
would consider putting it out there more directly to stimulate
discussion with the Japanese."

Project developers can often raise more capital for big infrastructure
projects, like LNG export terminals and pipelines, by striking long-term
offtake supply agreements, which help show that they will have the cash
flow to pay back loans or equity partners.

Diemer did not return a request for comment.

SEMPRA'S PLANS TO SCALE UP GAS EXPORTS come as the company faces
backlash on the home front for soaring gas bills at its utilities,
including accusations of price-gouging
<[link removed]>.

Gas bills have gone up across the board for Californians. Customers of
Pacific Gas & Electric, which is not owned by Sempra, saw gas bills rise
by about 30 percent between January 2022 and January 2023. At Sempra's
San Diego Gas & Electric, prices more than doubled, and at SoCalGas they
nearly tripled
<[link removed]>,
according to the California Public Utilities Commission. The price hikes
led consumer watchdogs to call for an investigation
<[link removed]>
into Sempra Energy.

It's not the first time Sempra has been accused of price-gouging. It
paid $377 million in 2006 to settle claims that it had manipulated gas
prices <[link removed]>
during an energy crisis, and paid another $410 million to settle similar
claims in 2010.

The push to sell more gas to U.S. allies in the Pacific comes less than
five years after Sempra sold off two major utility assets in South
America to companies based in China
<[link removed]>.
It described the sales at the time as part of an "increasing focus on
North American markets." But Sempra is pushing hard to capture Asian
consumers with new exports.

LNG boosters have enlisted Rahm Emanuel, U.S. ambassador to Japan and
former chief of staff to President Obama, to champion export capacity.
The support of officials in the administration is crucial for gas
lobbyists to show sustained demand for LNG.

"AMERICAN LNG EXPORTS ARE NOW A FORMAL U.S. POLICY AND DIPLOMATIC TOOL:
The Biden Administration in both Japan and the U.K. has formally made
LNG exports part of its short- to medium-term policy for solving energy
shortages. Ambassador Emanuel gave the reason succinctly in his keynote
address," Browning wrote in a memo summarizing the conference.

Emanuel delivered the keynote at WSTN's December event after the
governors of Utah and Wyoming sent him a letter of invitation written by
HBW Resources. Browning wrote to the staff of Utah Gov. Spencer Cox and
Wyoming Gov. Mark Gordon, asking them to invite Emanuel to the WSTN
event, according to the documents
<[link removed]>
obtained by the Energy and Policy Institute.

"We have sent the original invite (which I have attached for you) to the
Ambassador's staff in Japan ... they have advised us that we should
send notes of invitation/encouragement from our state governors and
tribal chairs," Browning wrote to Gordon's staff. He took the liberty
of copy and pasting in Gordon's signature.

Randall Luthi, chief energy adviser to Gordon, wrote to a colleague
saying it would be easy to get the governor's sign-off. "I can usually
do it relatively quickly," Luthi explained. "I waddle up the stairs with
the document in hand and get approval or signature. Once Andrew
[Browning] knows it is ok, it appears that he has the ability to add the
signature electronically."

Spokesperson Michael Pearlman told the

**Prospect** that while Gordon signed on to WSTN's group letter, the
individual letter Luthi was referencing was never sent.

~ LEE HARRIS, STAFF WRITER

Follow Lee Harris on Twitter <[link removed]>

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