In sign of energy dilemma, Mexico runs low on natural gas

McClatchy Washington Bureau

Altamira, mexico

Prices for natural gas over the border in Texas are at historic lows, so what happened earlier this month at the Gulf of Mexico port of Altamira, Mexico, might seem to defy market logic.

Huge tankers arrived from distant Yemen and Nigeria to off-load liquefied natural gas at a price four times the market rate for natural gas in the United States.

At Mexico’s two other liquefied natural-gas terminals, on the Pacific coast, the same phenomenon occurs, with expensive liquefied gas arriving from Peru, Indonesia and even Africa.

It’s a sign of Mexico’s enormous energy crisis, even as oil remains the mainstay of the country’s economy. Mexico has huge natural-gas reserves, yet those reserves are largely untapped, and the nation is a net importer of the fuel.

Abundant supplies of natural gas at low prices lie just across the border, but U.S.-Mexico pipelines are already handling all they can.

So Mexico is forced into the global market, importing natural gas from the far corners of the Earth. In short, Mexico is over the barrel on natural gas, made worse by a state-owned oil company that’s desperate to hunt for “elephants” — massive oil discoveries — rather than develop more humdrum, far-less-profitable natural-gas fields.

The situation has pounded factories in Mexico’s industrial heartland, where state-owned Petroleos Mexicanos, known as Pemex, has limited natural-gas pipeline capacity. Last year, Pemex sent out more than 100 critical alerts asking industrial consumers, mainly around Guadalajara, to reduce their use of natural gas, resulting in vast accumulated days of lost productivity.

“That amounted to 42 days in the last year where they did not have natural gas,” said Regulo Salinas, the head of the energy commission of Mexico’s Confederation of Industrial Chambers, an umbrella group representing industry. “Since they are at the end of the pipeline, there is not much that they can do.”

President Enrique Pena Nieto on Aug. 12 announced broad revisions to Mexico’s oil and natural-gas industries to boost exploration and production and allow foreign companies to invest in risk-sharing contracts. But even if Mexico’s Congress approves the changes, it will take years for them to result in greater gas production.

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