Mexico Evaluates Fracking Potential Amid Energy Dependence
Mexico is actively assessing the prospect of initiating fracking within the country, with President Claudia Sheinbaum having established a special commission to investigate methods for "sustainable fracking." This evaluation comes as Mexico's Tampico-Misantla Basin, geologically similar to the highly productive U.S. Permian Basin, currently yields significantly less output. The nation heavily relies on importing nearly 75% of its natural gas from the United States, primarily from fracked sources, raising concerns about energy independence and geopolitical risk.
Mexico is currently evaluating the potential for hydraulic fracturing, or fracking, within its borders. President Claudia Sheinbaum has appointed a special commission tasked with investigating how the country might implement "sustainable fracking."
According to Pablo Eisner, COO of Mexico Petroleum Company and a former geologist, Mexico possesses the Tampico-Misantla Basin, a geological formation comparable to the Permian Basin in the United States. While the Permian Basin is estimated to hold 150 billion barrels of hydrocarbons, the Tampico-Misantla Basin is estimated to contain 140 billion barrels.
Despite this similar potential, current production levels differ significantly. The Permian Basin produces over 6 million barrels of oil and 24 billion cubic feet of gas per day, while the Tampico-Misantla Basin produces approximately 60,000 barrels of oil and 150 million cubic feet of gas daily. This means the Mexican basin produces about 1% of the Permian's output.
The U.S., largely due to fracking, transitioned from importing 30% of its energy needs to becoming energy independent and the world's largest energy exporter within 15 years. The Permian Basin alone has reportedly generated over 800,000 jobs and US $1 trillion in value. In contrast to the thousands of horizontal-multifrac wells drilled annually in the Permian, only 62 such wells have been drilled in total in Tampico-Misantla.
Mexico currently imports nearly 75% of its gas from the Permian and Eagle Ford areas in the United States, all produced via fracking. This dependence on U.S. energy is cited as a geopolitical risk, particularly given potential future shifts in U.S. oil production that could impact gas availability and prices for Mexico.
The history of hydrocarbons in Mexico dates back to the early 1900s, leading to the creation of Pemex in 1938, which placed total control of exploration, production, refining, and distribution under federal government oversight. Pemex has since faced challenges including inefficiency, rising debt, and declining production, necessitating financial assistance and structural reforms from successive governments. In 2015, under President Enrique Peña Nieto, Mexico opened gasoline distribution to competitors.
According to Mexico News Daily, the results of the special commission's investigation are expected next week.
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