Saturday, June 15, 2024

Critical natural gas shortage threatens to shut down manufacturers

If natural gas supply doesn’t return to normal within the next two weeks, industrial production could grind to a halt and some factories may even be forced to shut down, two business leaders warn.

Francisco Cervantes, president of the Confederation of Industrial Chambers (Concamin), and Enoch Castellanos, chief of the National Chamber or Industrial Transformation, described the gas shortage as “critical,” explaining that several companies are only operating at 30% capacity.

States in the north, west and southeast of the country are all affected, they said.

While the private sector has been raising the alarm about gas shortages for months, there is a “clear ignorance” of the situation on the part of federal authorities, Castellanos charged.

“For that reason, we’ll hold them responsible for [manufacturers’] stoppages and the unemployment that follows . . . .” he said.

The Business Coordinating Council, an influential private sector group, warned in February that natural gas shortages would force factories to close.

Mexico’s gas production has been on the wane for a decade, forcing the country to increasingly depend on imports, most of which come from the United States.

But while shortages are not a new phenomenon, they have recently worsened, said José Luis de la Cruz, director of the Concamin Economic Studies Center.

Nuevo León, Coahuila and Tamaulipas have been particularly hard hit, he said.

The Yucatán peninsula, which receives gas from northern states, has also suffered from the shortages and blackouts in cities including Mérida and Cancún have been blamed on an insufficient supply of fuel.

Guanajuato, Michoacán and Jalisco have also been affected by the gas shortages, de la Cruz said.

Like Castellanos, Cervantes also took aim at the federal government.

He said the previous administration made a “very big” effort to bring gas to the country through the construction of the submarine Texas-Tuxpan pipeline.

It was completed last month and has the capacity to move 2.6 billion cubic feet of natural gas per day, but hasn’t been put into operation because the contract between the Federal Electricity Commission and the companies that built it is going to international arbitration.

“. . . For eight months we’ve been waiting for the service. At the middle of July we won’t be able to put up with the gas shortage anymore,” Castellanos said.

“If we produce with another input that isn’t natural gas, we’ll lose competitiveness.”

Source: El Economista (sp) 

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