Natural gas imports from the United States increased during the six-term of former president Andrés Manuel López Obrador and hit a record high in the first nine months of 2024.
The increase in natural gas imports from the U.S. occurred despite López Obrador’s repeated pledges to put Mexico on the path toward energy self-sufficiency.
Citing data from the United States Energy Information Administration (EIA), the newspaper El Economista reported Thursday that Mexico’s natural gas imports from the U.S. increased 5.9% in annual terms between January and September to reach 6.537 billion cubic feet per day (ft³/d).
That figure is 42.3% more than that of the first nine months of 2018, the last year that López Obrador’s predecessor, Enrique Peña Nieto, was in office.
EIA data shows that Mexico’s natural gas imports from the U.S. increased virtually every year during López Obrador’s six-year term of government, which concluded Sept. 30.
Mexico is the world’s largest importer of U.S. natural gas, which mainly comes into the country via pipelines. Gas-fired combined cycle power plants are the biggest consumers of natural gas in Mexico, accounting for around 60% of total usage, according to El Economista.
Imported natural gas — almost all of which comes into Mexico from the United States — accounted for 72.1% of Mexico’s total usage last year, according to Energy Ministry data, an increase of almost nine percentage points compared to 2018.
Increased reliance on U.S. natural gas imports coincided with a decline in domestic production
Between 2018 and 2024, production of natural gas in Mexico declined 3.6% to 3.772 billion ft³/d, according to state oil company Pemex. Thus, the increase in the quantity of natural gas imported from the United States over the same period — 42.3% (as mentioned above) — was much bigger than the decrease in domestic production.
Mexico has large reserves of natural gas, but production has been declining for an extended period.
According to a study carried out by the Mexican Institute for Competitiveness (IMCO), a think tank, and the Mexican Natural Gas Association (AMGN), natural gas production in Mexico declined 35.1% between January 2010 and September 2024.
“Mexico needs a strategy that allows it to gradually increase the production of this fuel,” IMCO and AMGN said in a statement on Wednesday.
“The country has an energy security risk by depending on a single supplier for the majority of its [natural gas] use,” they said.
IMCO and AMGN offer a diagnosis and remedy
IMCO and AMGN said that cheap “gas prices in the United States and the prioritization of crude oil production in Mexico have disincentivized national production of natural gas.”
They said that “schemes with attractive incentives” are needed to spur national production of natural gas by both Pemex and private companies. IMCO and AMGN also said that the government should “facilitate” joint ventures between Pemex and private companies in order to boost domestic production of natural gas.
The think tank and industry association are also advocating investment to improve Mexico’s natural gas storage, transport and distribution capacity.
“Mexico needs to invest quickly in the entire natural gas value chain in order to increase its possibilities of generating, attracting and retaining investment and to strengthen energy security,” they said.
IMCO and AMGN said that Mexico doesn’t have sufficient storage capacity for natural gas, putting it in a “position of vulnerability” in the face of possible supply interruptions.
They also said that “without expanding access to natural gas, it won’t be possible to increase investment levels in regions with lower economic development.”
Baja California Sur, Guerrero, Nayarit and Chiapas don’t have access to natural gas and use is low in Zacatecas and Morelos, IMCO and AMGN said.
They also said that natural gas infrastructure needs to be built to allow Mexico to reduce reliance on “more contaminating” energy sources such as coal, fuel oil and diesel, which are also used for electricity generation.
“For Mexico, natural gas is an essential input for economic development of all regions of the country. In terms of competitiveness, efficiency, cost, energy security, the energy transition and general well-being, the abundance of this fuel in North America opens the door to multiple opportunities for investment and economic diversification,” IMCO and AMGN said.
They also said that Mexico has an opportunity to export natural gas and become “an important player” in the global market for the fuel.
“The projects underway in Altamira, Ensenada and Puerto Libertad stand out,” IMCO and AMGN said.
“In an environment of limited resources, it is fundamental to identify areas for [natural gas] collaboration between the public sector and [private] companies in order to guarantee the country’s energy security, replace more contaminating fuels …and allow the installation of new industries in regions of the country where today that is not possible due to the lack of access to competitive energy,” they added.
Under President Claudia Sheinbaum’s leadership, the current government is aiming to increase natural gas production in Mexico to 5 billion ft³/d during its six-year term. But to achieve self-sufficiency for the fuel, the attainment of even loftier goals will be required as usage last year was 8.559 billion ft³/d, according to the Energy Ministry.
With reports from El Economista and El Financiero
