Mexico has to rely on US for natural gas

According to a former Mexican government official, the refusal of the state-run PEMEX Gas y Petroquímica to invest in natural gas drilling will make the country dependent on gas imports from the U.S. for a considerable time.

Speaking at a Hart Energy conference in Houston, H. Javier Estrada Estrada, former director of energy planning for the country's secretary of energy, said Mexico is struggling to remain a net energy exporter. The biggest problem, he said, is a continued lack of natural gas production.

"I think it's key to the development of Mexico," Estrada said of increased domestic gas production. "The problem is that you have two Mexicos: One is exporting oil, and the other is importing natural gas."

The opportunity to expand gas production, Estrada said, is clear — but PEMEX has shown a lack of interest in investing the time and effort in developing a resource with lesser returns than oil.
Mexico probably has plenty of gas in the portion of the Eagle Ford that extends into that country, but it is too dangerous to drill because of the domination of the drug cartels in that area.   Mexico's inability to control the cartels is costing them handsomely in revenue and in added cost from importing oil.


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