There may never be a more certain prescription for destruction of a UNESCO World Heritage Site than the massive fossil fuel production project – called Saguaro Energia LNG (“Saguaro”) — that Houston-based Mexico Pacific Ltd. is planning for the Gulf of California. But the project would likely be infeasible without significant financial support from the project’s principal equity owner Quantum Capital Group (“Quantum Capital”), a Houston and New York-based private equity firm with a portfolio substantially devoted to investment in fossil fuel projects.
With this in mind, and consistent with its December 9, 2024 letter to Mexico Pacific Ltd. opposing Saguaro, the Natural Resources Defense Council sent an Open Letter this week to Quantum Capital citing the inconsistency of its extensive Environment, Sustainability and Governance (“ESG”) commitments with its active financial interest in the Saguaro project. Addressed to Quantum’s Founder and CEO Wil VanLoh, the communication notes his recent Letter to Stakeholders and its prominent assertion that “sustainability and the environment” have been “at the core of [Quantum’s] business since our inception more than 26 years ago.”
Noting this and similar representations in the company’s 2024 ESG Report, NRDC highlights the company’s failure to disclose or address Saguaro’s potential negative impacts on one of the most important regions of biodiversity on Earth – the Gulf of California – which has been repeatedly recognized by the United Nations and Mexico for its unique conservation value as the site of a World Heritage Site, a Biosphere Reserve, a Migratory Bird Refuge, and other Protected Areas under Mexican law. It is home to an exceptional diversity of species (including endangered species of blue (and other great) whales, whale sharks, and leatherback sea turtles), many of which will be threatened by the Saguaro project, its associated infrastructure, and related industrialization and shipping.
For good reason, renowned oceanographer Jacques Cousteau named the Gulf — also known as the Sea of Cortez — the “Aquarium of the World.”
In the only reference to the Saguaro project, Quantum Capital’s ESG Report, at 75, mentions its “shorter shipping route that avoids the congested Panama Canal,” resulting in “cost savings, logistical advantages, and lower GHG emissions” for delivery of gas to Asia from the Permian Basin. Yet, the fact is nowhere disclosed that “the shorter shipping route” would traverse natural Protected Areas, a marine area of unique biodiversity, and one of the world’s exceptional natural ecosystems.
With a caution to Quantum Capital and its investors about reputational risk, NRDC elaborates:
“No details of that route are provided, no mention is made of what environmental concerns it might pose, and no hint is offered of the opposition and, ultimately, condemnation that will legitimately attach to its use of the uniquely biodiverse Gulf of California as a shipping channel for the production and transport of fossil fuels. Given Quantum’s significant financial role in support of the Saguaro project, this condemnation will inevitably extend as well to your company and its investors.” (Emphasis added.)
