Texas, Arizona Poised to Boost Natural Gas Exports to Mexico

Published October 15, 2012

Texas and Arizona are poised to reap the benefits of domestic natural gas production, as Mexico is building new pipelines to import natural gas from the two U.S. states. 

Central Economy Stifling Production

Mexico is blessed with some of the largest natural gas deposits in the world. Nevertheless, Pemex, the government-owned natural gas monopoly, has done a poor job of producing and delivering natural gas for power generation. In an attempt to alleviate near-constant shortages, Pemex is using an offshore subsidiary, MGI, to build two pipelines to transport U.S. natural gas from Texas and Arizona. From there, the pipelines will connect to a privately owned pipeline system under construction in northwestern Mexico.  

The two new U.S. pipelines will run from south of Tucson to the Arizona-Mexico border and from Corpus Christi to McAllen near Texas’s border with Mexico. The pipelines are scheduled for completion by late summer 2014. 

U.S. Reaping Natural Gas Benefits

Abundant Texas gas from the rich Eagle Ford shale formation south of San Antonio looms large in Mexico’s future. Mexico already imports 15 percent of its natural gas from the United States. Energy experts say this development is further evidence of shale gas’s potential as an export, either through pipelines to Mexico or as liquefied natural gas (LNG) to overseas markets.

“America’s newfound natural gas abundance has totally changed the energy landscape,” said Marita Noon, executive director of the New Mexico-based Citizens Alliance for Responsible Energy.  

“Now, thanks to the pipelines that will take U.S. natural gas to Mexico, it could also improve America’s trade deficit,” Noon explained. “For too many years, we’ve been sending our dollars overseas and getting very few of them back. Finally, we have a product that foreign countries really want.”

Bonner R. Cohen, Ph. D., ([email protected]) is a senior fellow at the National Center for Public Policy Research.