Mexico is breaking records for importing natural gas from the US

Relations with Mexico have actually been looking up lately. We’ve seen evidence of this in their willingness to help out with the caravan migrants approaching the border and a pending trade deal that’s in the works. But there’s one more area where the future looks particularly bright. Mexico is importing natural gas from the United States at a record-breaking pace. The Houston Chronicle has the details.

U.S. natural gas exports to Mexico hit a new record amid sagging production south of the border.

Mexico imported about 6 billion cubic feet of natural per day from the United States in August, the U.S. Energy Information Administration reported late Thursday afternoon.

Some 5.1 billion cubic feet of natural gas per day was delivered via cross-border pipelines while another 860 million was delivered using liquefied natural gas import terminals, EIA data shows.

The record figures come at a time when natural gas production in Mexico continues to fall and demand from new power plants and factories is growing.

These are significant export numbers for the American oil and gas industry, but what’s driving these sales? It’s a combination of factors, but the largest is that Mexico’s domestic natural gas production has been dropping of late. In October of this year, they managed to produce 2.4 billion cubic feet per day. That’s not insignificant, but it’s still more than 20% lower than what they were producing in October of 2016. It’s a pretty big drop in two years.

Some of their reserves are drying up, which accounts for part of it, but they also haven’t been able to drill new wells. Demand is rising at the same time. The country has installed thousands of miles of natural gas pipelines across the country and new business expansion is driving demand faster than they can adjust.

Gee… it’s a good thing they just happen to live next door to the world’s biggest producer of natural gas, huh? And that means it’s in their best interests to keep good relations with us. When we were heavily dependent on OPEC oil, that gave them leverage over us. Now that we’re a net energy exporter, the influence game goes in the other direction.

Yes, this is a relatively small news item in the larger scheme of things, but I wanted to make sure you filed this one away for future reference. The American energy market is booming and that’s great news for their shareholders. But they’re also keeping a vast army of people employed and increasing America’s influence and prominence in the world. The current state of our relationship with Mexico is only one of many examples out there.