The US border with Mexico has a sad cliché aura hanging over it. U.S. citizens head south for shopping, dental work, and other bargains (light-adventurous travel buddies have even wandered south from Tucson to Nogales to buy nothing more than a haircut. (and once is enough)).
The other cliché is a long string of desperate people looking for a better life north of the border, sneaking through at night or in dangerous conditions.
But times they are changing. I’m not sure what the Spanish phrase for “What the…” is, but I’m sure it’s often heard nowadays as a significant numbers of Americans going south crossing the border in search of a better life, at the same time Mexicans are getting used to the huge hiss as billions of cubic feet of natural gas pour into southern Mexico – far more, in fact. needs of the country.
Strange change is happening, and if it goes as expected, the hiss of flowing gas will create mountains of money for Mexico, money that has nothing to do with drugs (it was a week cliché!). It’s something better.
Gas flowing into Mexico is nothing new, but here’s the thing – companies could soon get Canadian natural gas onto an LNG carrier easier, faster, and cheaper via Mexico than through Canada. if not the exact molecule, it’s very easy to connect/trade one).
What’s up with that, you might ask, and it’s a wisest question. The whole idea seems counter-intuitive or just crazy – Mexico is not a gas power, nor is it even close to meeting its own needs. According to the best book ever, BP’s 2022 World Energy Statistical Review, in 2021, Mexico has produced 29 billion cubic meters (bcm) of natural gas and consumed 88 bcm – deficiency is close to 60 bcm (~6 bcf/day).
Mexico, since last year, has been quite interested in importing U.S. natural gas just to meet domestic demand. September 2021 article The LNG Industry website notes that Mexico “has been preparing additional pipeline capacity for imported natural gas to ensure industrial demand”.
Apparently, smart Mexicans thought beyond that. As recorded in this Post March 2022Mexico currently has 12 LNG export projects in the early stages, with five under construction.
Huh! In 2021, Canada produces 172 bcm and consumes 119 bcm – production in excess of 53 bcm per year, must be exported. It’s no surprise that Canada has been a natural gas exporter for decades.
But… Will Mexico become an LNG exporter sooner than Canada and will have a larger export volume within 5 years?
You then.
Mexicans might just see Canadians as big, drunken white blobs in swimsuits that roam from buffet to bar to pool in a triangle that wobbles until they fall over. a red pile, but perhaps that performance gave them the confidence to stay ahead of their efforts to develop the LNG export industry. They looked to the north at the relatively redundant markets, in Canada, and the stubbornness of the United States in building natural gas infrastructure (Canada removed about 15 proposed LNG facilities and the United States). The United States famous for having the world’s largest gas field (Appalachian) couldn’t get the massive output for a gas-starved US east coast hundreds of miles away – all because of the farce blocking pipelines from anti-hydrocarbon government and their ENGO Naginis (ask Harry Potter)). Mexico looked at its shores, both, and the string of gas pipelines that cross the U.S. border, and said, “Hey, we can do it.”
Mexico’s LNG projects use a network of gas pipelines that bring material across the border from the United States, particularly the Permian and western regions where Canadian gas is currently accessible through the network. The pipeline stretches north to Canada.
The five Mexican projects under construction will export over 2 billion cubic feet per day (bcf/d) and are expected to come online between 2024 and 2027. As well as dental, beverage and haircut, everything in Mexico is much cheaper – five projects under construction will cost a fraction of Canada’s obnoxious beasts. A Mexican LNG hub announced in September 2022, with export capabilities almost 1 bcf/daywill cost 4-5 billion dollars.
TC Energy announced that a pipeline to connect two ports in the region with gas supplies further north would cost about $4.5 billion, so less than $10 billion for a terminal and a pipeline supply to a number of other ports.
Canada’s only major project underway – LNG Canada, with its Coastal GasLink connector – is expected to cost around $40 billion. (LNG Canada will be available in several stages with the first phase latch in $18.5 billion, and recent Coastal GasLink’s cost increase of the connecting pipeline to $11.5 billion.)
Those kinds of staggering costs are what happens in a regulatory quagmire that causes Canada’s hydrocarbons to die sooner than to warm the world, and/or when natural gas pipeline builders have to work shifts night to avoid flying axes and deal with the aftermath of Hollywood celebrities enlisting to contaminate the water in their adorably ignorant ways.
It’s also important to keep in mind the timelines – Mexico will launch an entirely new industry within a few years and will export significant LNG within the 2025-27 timeframe.
Canada will export less than Mexico at the time, for projects first announced more than a decade ago (Coastal GasLink and Canadian LNG).
In 2020, the federal government cataloged 18 Proposed LNG Export Facility for Canada By 2027, Canada will have two or three channels online, if all goes well and Mexico looks set to double that number, with more than double the volume.
In an even more ironic and rather ironic twist, those Mexican export terminals can actually ship Canadian gas, since the relationship between Canada and Mexico will be there, in fact, for the most part. a Canadian company (TC Energy) owned/operated.
Canadian producers are actively looking to ship gas to the southern United States in hopes of getting it on board LNG ships of any kind. It would be ironic if gas could get to the seas faster through Mexico, but the joke is entirely in Canada – it is the Mexicans whose fleets will benefit from the soaring global LNG prices (with one estimate). shocking what the Canadian government is leaving on the table – as a government alone, about $2.8 billion per monthunderstand here).
It would be unwarranted to view this criticism as the only channel of support for the LNG industry, even though it is a significant component – the world is hungry for LNG and many people will die without it. But besides that, the story is also worth thinking about in the context that Canada can build whatever.
How long will a new mine take, when we commit to the world that we will extract valuable transition minerals? How long will it take to build new transmission infrastructure, or, heaven forbid, some new pipeline?
How many layers of regulation exist, including new layers of “environmental” (not) regulations under which governments can shoot down anything if it goes against “climate ambitions” Theirs, those are arbitrary numbers pulled out of thin air for press conferences? (The US had a similar problem, and so did Europe, until practically all the nonsense turned into a giant coal-fired boiler.)
But let’s put aside the relatively petty competition between who gets gasoline to market first. Let’s look at the bigger picture, where the challenge can be summed up succinctly as follows: The world is running out of energy, leading to dangerously high prices (oil, natural gas and coal) danger and rampant inflation. The problem can be fixed in two ways: first, if prices rise high enough to dampen demand, this will be a global disaster – factories will close, output of key materials will go down. affected, job loss and inflation will drive up the price of every key element of human existence.
Another way that could fix the problem is to supply more energy to the world – build pipelines, stop trying to kill off the hydrocarbon industry, introduce stable regulations that support both environmental progress and the like. market and supply stability.
Germany begged Canada for LNG, and when we refused to buy LNG, the Germans went to Mexico and found a more constructive audience. Many countries want LNG to be inferior (or worse) than Germany, but do not have the resources to finance infrastructure or even competitively bid for the gas itself. We don’t even want to think about the physical shortage, never mind the high prices, of what natural gas will mean for developing countries.
As a general audience, we too have a choice: Hang out with climate catastrophes, worry about the road 30 years from now instead of next, and agree that hydrocarbons need to go. , or stand up for the developing world that would perish if that happened. allowed to gain traction.
A great gift to put under a tree, or under a turkey at Thanksgiving, American friends. Watch “The End of Fossil Fuel Madness” at Amazon.ca, indigo.caor Amazon.com. Thanks for the support. If you don’t buy the book, send some money to the good people of Ukraine and Iran who really need it. But one thing’s for sure. Or both. Depends on you. Not presure.
Read more insightful analysis from Terry Etam here, or email Terry here.
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