The consumption of natural gas in Mexico has grown considerably in recent years to the point of becoming the energy source with the largest participation in primary energy consumption, mainly due to its greater use in electricity generation as a substitute for coal and crude oil and its by-products.
According to a recent study published by the Subregional Headquarters in Mexico of the Economic Commission for Latin America and the Caribbean (ECLAC), natural gas has been the most widely consumed fuel in that country since 2014; its participation in the energy basket exceeds 48% and remains on the rise. For the last two decades, it has been the energy source with the greatest dynamism, surpassing growth in the demand for electricity and overall demand in the economy. The driver of this dynamism has been the electrical industry, with its demand for gas increasing fourfold between 2000 and 2019, which accounts for 95% of the increase in natural gas consumption in the country.
The publication entitled Natural Gas in Mexico: Impact of the Policy for Self-Sufficiency, Security and Sovereignty in the Regional Energy Transition and Integration (in Spanish only) analyzes the state of natural gas in the North American country, including production, consumption and imports, problems to be solved, opportunities and dilemmas, and especially the implications of the new energy policy in connection with the energy transition being carried out by the current Mexican government, as well as possible synergies with emerging markets for natural gas in Central America and the Caribbean.
With this document – which was enriched by the comments and opinions arising from a meeting with experts from academia, the public sector and the industry, held virtually in September 2021 – ECLAC seeks to contribute to strengthening public policies on natural gas in Mexico.
Greater imports have been used to meet the growing demand for natural gas, since production has not been able to keep apace; thus, the gap has had to be closed with imports that represent 70% of the country’s total consumption today, and up to 93% of the total when the dry gas consumed by the oil industry is excluded. Ninety-six percent (96%) of the external supply comes from the United States, which offers the advantage of proximity, availability and a low price.
Thus, declining natural gas production in Mexico and growing natural gas imports from the United States have turned Mexico into a net importer of this fuel and the world’s second-biggest market in terms of net imports of natural gas via a pipeline, lagging behind Germany alone.
According to the document, it is foreseen that imports will continue to grow unless the current administration’s policy for self-sufficiency, security and sovereignty is successful. In this regard, the study analyzes the National Development Plan 2019-2024, the Sectoral Energy Program 2019-2024, the new energy policy guidelines, and the reforms proposed to the electricity and hydrocarbons laws.
Finally, the publication examines regional markets’ prospects for supplying natural gas to Central America and the Caribbean and the role that Mexico could play in such supplies.