Natural Gas Use Continues to Rise in Mexico

According to data from the Mexican Ministry of Energy, the demand for natural gas in the Country has gradually increased over the last few years. In 2006, this demand was 5672.9 Mmscf/d (Million standard cubic feet/day), and in 2016 it was 7618.7 Mmscf/d. The latest data, from 2021, point to a demand of 8,265 Mscf/d, used in the electricity, oil, and industrial sectors, mainly. Therefore, the use of natural gas continues to rise in Mexico.

Natural gas is more efficient and generates less CO2 than other fossil fuels. However, it still emits a large amount of carbon into the atmosphere in the form of both CO2 and methane. Perhaps this is why natural gas demand and CO2 emissions do not correlate in Mexico if we attend to data (2006-2016).

Natural gas demand (Mmscfd) and total CO2 emissions (millions of tons) in Mexico (data projected to 2020)

Natural gas national production has been decreasing, as it was 4603 Mmscf/d in 2012 and only 3568 Mmscf/d in 2016. In 2021, natural gas imports reached 5,905 Mmscf/d – 73% of demand. Therefore, Mexico has become a major importer of natural gas, which arrives through pipelines and liquefied natural gas, 90% of which comes from Texas (USA).

The increase in natural gas use coincides with the decrease in coal use (from 22478 tons in 2016 to 9281 tons in 2020). The use of oil started to decrease in 2016, from 1037 TWh equivalents per year in 2016 to 685 TWh in 2020. Therefore, natural gas has indeed served as a substitute. The drop in coal and oil consumption coincides with a decrease in CO2 emissions from 482 million tons in 2016 to 356.97 in 2020. Emissions due to coal and oil in Mexico have followed a downward trend in the last ten years, while those of natural gas have increased, but due to the large volume of emissions involved in the use of oil, its substitution by other sources, although they also cause greenhouse emissions, is favorable.

The Mexican Government’s policy concerning natural gas is to increase its use and storage in the coming years. To this end, it has developed the Public Policy on Natural Gas Storage which, “establishes the obligation to constitute a minimum of 5 days of strategic natural gas inventory by the year 2026, which will be used only for the national supply.” Previously, Mexico was self-sufficient in its natural gas consumption and even exported it, while now the country must import most of it. Mexican President Andres Manuel López Obrador (AMLO) proposed installing a natural gas network in neighborhoods of large cities to guarantee lower prices than those of LP gas. However, according to other media, natural gas does not appear in this government’s indispensable package of energy sovereignty.

For Petroleos Mexicanos (PEMEX), producing natural gas has never been attractive due to its very high-cost structure. In addition, gas flaring in oil fields occurs when the gas that accompanies the oil lacks the infrastructure to be transported or used. Considering that these flaring damages the environment and causes economic losses, current energy policies are not efficient enough to take advantage of the potential of natural gas as a less polluting energy source than others. Therefore, the procedures regarding natural gas are not in line with the objectives of fighting climate change that the government claims to be adopting. If natural gas production were domestic and more efficient, it would go a long way toward mitigating greenhouse gas emissions.

This Post was submitted by Climate Scorecard Mexico Country Manager Pablo David Necoechea Porras


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