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For more information contact Jacqueline SanchezPRESENTATION PDF
For many years there has been discussion of “gasifiying” the energy matrix in Mexico. Through policies and market developments, there have been important gains made particularly in the usage of cleaner burning natural gas in the country’s electric sector. Related to those advances and increased consumption has been a boom in US-Mexico natural gas trade over the last several years. Mexico’s own production of natural gas has not kept up with demand, and imports from the US have made up the difference. Estimates of US natural gas deliveries to Mexico have been consistently overtaken by the spiking cross border trade. Indeed, last September the Comisión Nacional de Hidrocarburos forecasted that if current trends continue, Mexico in 2030 would import 94% of all the natural gas that it consumes. Substantially all of those imports would come from the United States.
The increasingly heavy reliance by Mexico on imported natural gas, particularly from the United States, has created a debate and discussion on the risks associated with the current market. In two papers published by the Institute of the Americas last year, John McNeece identified the key concerns as availability risk, pricing risk and political dependency risk.
Relying on data and forecasts from the US Department of Energy, the analysis shows that availability risk and pricing risk are manageable. Political dependency risk – i.e. the risk that the US President would threaten a cut-off or cutback of natural gas deliveries to pressure Mexico – is limited by US political constraints, legal restrictions and treaty obligations.
McNeece concludes that considering the benefits to Mexico of US natural gas imports, the Mexican government could reasonably conclude that the risks presented are acceptable. At the same time, if the Lopez Obrador administration seeks to increase Mexico’s own production of natural gas and reduce its dependence on imports, McNeece’s research indicates that Mexico has a reasonably secure supply of natural gas through imports while it makes the transition to increased self-sufficiency.
Join us for a webinar and discussion with John B. McNeece III, Senior Fellow at the Center for US-Mexican Studies, University of California, San Diego and Veronica Irastorza, Associate Director at NERA Economic Consulting in Mexico City and a former Deputy Secretary of Energy for Planning.
McNeece and Irastorza will share further insights from the papers and analysis on the issues of Mexico’s natural gas imports, risk management, the role of natural gas for energy self-sufficiency as well as Mexico’s broader natural gas outlook and investment environment as the new year unfolds in Mexico.
The webinar and virtual panel will be held Wednesday, February 6 at 10:00am San Diego (12:00 pm Mexico City time; GMT/UTC – 8 hours). Their formal presentation will be followed by a live Q&A session with the audience.
For more information contact Jacqueline Sanchez
The administration of Andres Manuel Lopez Obrador and his energy team hit the ground running after the inauguration last December. To date, they have unveiled a series of proposals for the energy sector including a national electricity program, a national refining plan and a plan aimed at boosting oil production. The announcements underscore the longstanding overarching narrative of the new administration and their outlook for energy centered on the issue of energy self-sufficiency. But dominating headlines since we all returned from the holidays has been the government’s efforts to combat illicit fuel theft, the so-called huachicoleo.
The plans released for the nation’s energy sector suggest myriad avenues aimed at energy self-sufficiency during the sexenio. Perhaps most important are the interconnected issues of oil production, fuel imports and infrastructure. The economic and investment implications are critical to understand as well.
Join us for a lively discussion and debate with John Padilla, Managing Director, IPD Latin America and Gonzalo Monroy, Managing Director, GMEC. Padilla and Monroy will share insights and analysis on the issues of oil production, refining, fuels infrastructure and investment as the new year unfolds in Mexico.
The webinar and virtual panel will be held Thursday, January 31 at 2:00pm San Diego (4:00 pm Mexico City time; GMT/UTC – 8 hours). The session will be delivered in a discussion format and incorporating Q&A with the audience.
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