President Trump has a lot of plans for the United States, and he’s wasting no time in getting them started.
The dust hasn’t even settled from the U-Haul trucks peeling out of the White House, and it seems as if the new administration wants to rehash every trade agreement, including our exit from the United Nations and NAFTA, new tariffs on imports, and making sure all new infrastructure improvements are made with 100% American resources.
Mexico will come to terms with the fact that it is in the throes of a serious energy crisis... one that trumps any issues — including a 1,000-foot border wall...
prices started declining in 2014 as production ramped up in the Marcellus, natural gas has become the new darling of the U.S. energy markets.
And with most of the world jumping on the clean energy bandwagon post-Paris Agreement, a cheap, abundant fuel that emits a fraction of the greenhouse gases of coal was just what the doctor ordered.
Unfortunately, our massive shale gas resources weren’t exactly a godsend for investors...
Natural gas hit a low in 2012 when it dropped below $2. And even though Mexico had already been importing natural gas from Texas for years, the lure of cheap supply was too strong to be ignored.
Much like countries across the globe are doing today, Mexico began replacing coal plants with natural gas plants and importing as much fuel from the U.S. as possible.
Unfortunately, there’s only so much pipeline capacity to go around. When that capacity is full, you have to supplement your imports with costlier LNG to cover the gap.
Now, some of you may know that Mexico has some pretty impressive natural gas reserves of its own...
thirst for electricity took off, the country felt a supply squeeze it had never seen coming.
Of course, it took until 2013 for Mexico to finally institute a set of energy reforms to aid its dying energy industry.
Soon enough, prices spiked to about $6 by early 2014, and the country’s dependence on U.S. supply only increased.
prices were high, U.S. exports to Mexico kept climbing.
By the time natural gas dipped below $2 in March of 2016, Mexico was already importing more than 100 trillion cubic feet per month, and it hasn’t come close to dropping below that number since.
Unfortunately, the country is coming up short in reversing its energy crisis...
for Mexico is that despite his dislike of NAFTA, President Trump will never be opposed to selling our natural gas to them.
In fact, bright and early on Monday, he signed a new executive order that called for slashing two old regulations for every new one that is created.
And if you couldn’t guess by now, our newly elected Commander in Chief is going to mow down regulations in the oil and gas industry.
Clearly the billions spent lobbying is about to pay off in spades.
So of course he’ll want to keep the natural gas flowing south, especially if it means squeezing more money out of Mexico to pay for the inevitable wall.
And will Mexico keep paying?
At this point, it truly doesn’t have a choice...
The country’s imports are steadily growing as it consumes more and more electricity.
Mexico is going to need an ever-growing amount of natural gas to meet its demand right now, and it could take years, maybe decades to develop its own resources.
Which means even if it refuses to pay for “The Wall,” Mexico will be paying for the pipes.
The country desperately needs to invest in its midstream oil and gas industry, even before it can really begin upping production from home.
Pipelines are already in the spotlight for Mexico
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