Drilling For Shale Gas In Mexico

 “It’s HUGE, it’s huge!”

Jaime Williams is president of the energy and climate change commission of Concamin in Monterrey, Mexico. Think of it as Mexico’s Industrial Chamber of Commerce.

“We are the interested party! The industrial sector, the private sector is the interested party in it!”

Williams says the maquilas in Mexican Border States use a lot of electricity. And in recent years they’ve been importing more and more natural gas from Texas just to keep the lights on.

“And they’re looking, just like we are, to become more energy independent.”

Bob Gibb specializes in the energy industry for Navigant Consulting. He says the US exports around four billion cubic feet of gas a day to Mexico, up from three billion just a year ago. He says, Mexico’s governmental structure could enable the ramping up of that country’s own production.

“I would suspect that it’s going to be something that they will be able to 'accelerate' if you will at a greater rate of development than we can in the United States. They’re not as likely to have the political discussion that we have here. That’s not to say they’re going to ignore it, they’re just going to be able to address it a little more quickly.”

Pemex is the state-run company that owns Mexico’s Oil and Gas resources.  Under Mexican law, it owns those resources even if they’re discovered under private property. That alone could speed up drilling. One thing that could hinder drilling is a lack of technical expertise. Gibb says Pemex’s efforts to partner with foreign companies have not been very successful in the past.

“They may have to look at that again, if they want to develop this huge resource that Pemex itself today doesn’t have the capability to do it.”

Eagle Ford Shale

He doesn’t think Mexico getting into the gas business will hurt the US industry financially. But expanded drilling in the border region is troubling for environmentalists in Texas, who continue to raise concerns over the fracking techniques that let companies extract gas from shale formations that were previously unreachable.

“Absolutely, certainly Mexico has a pretty bad track record on environmental enforcement. I mean, one, they put far less money into it.”

Luke Metzger is the director of Environment Texas.

“And so certainly we’ve seen for any number of industries that officials have looked the other way when there are violations of the law.”

Environmentalists worry about, among other things, methane gas pollution associated with drilling, and the large quantities of water used to extract the gas. Metzger says if Mexico does ramp up its fracking, it would be well served to look to best practices in the US.

“Hopefully they will adopt strong environmental standards if they go down this path.”

But, back in Mexico, Jaime Williams says his country is well equipped to handle environmental dangers.  He says the real roadblock standing between Mexico and a booming natural gas industry might be financial. Pemex–like much of the energy sector- is investing most of its money in oil drilling, which has a bigger return on investment. So Williams is left hoping that the Mexican government will allow private Mexican investors to partner with those foreign firms that Bob Gibb talked about, to kick start Mexico’s natural gas economy.

“We say in Spanish, no picha, no catcha and no dejaba tear no? (laughter)  They’re not pitching, they’re not catching and they don’t allow us to bat no? So what can we do?  If they’re not going to play, well move aside and let us play!”

And if they do make a play in Mexican Shale gas? Williams says, it would encourage even more industry along the Mexican border. Growth that would also leaves its mark both sides of the border.

 

>For more, visit StateImpact Texas.

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