US – Mexico gas exports to double in next five years says EIA

Doubling of US natural gas exports may undermine Mexican wind as well as coal and fuel oil


By Gerard Wynn

Mexico gas-fired power generation will  surge in the wake of a projected doubling in US pipeline imports, the U.S. Energy Information Administration said last Thursday.

The shift to natural gas would cut dependence on more polluting fossil fuels including coal and oil, but may also undermine emerging wind power growth in the south and west of the country.

The US shale gas revolution has already slowed growth in the country’s domestic wind power sector, by cutting wholesale power prices and market incentives for the renewable power source.

“Nearly three-quarters of the projected growth in Mexico’s natural gas consumption between 2012 and 2027 is projected to occur in the electric power sector,” said the U.S. government energy research service, quoting data from Mexico’s national energy ministry, SENER.

“The growth comes largely from new combined-cycle plants, which benefit from greater operational efficiencies and lower emission levels compared to other generation sources.”

In all, Mexican natural gas consumption in the power sector would increase to 6.1 billion cubic feet per day (Bcf/d) in 2027, compared with 2.7 Bcf/d in 2012, according to the Mexican projections.

US natural gas producers would be major beneficiaries, with pipeline exports projected to more than double to Mexico in the next five years.

That would follow a doubling between 2009 and 2013, according to SENER.

“SENER projects that US pipeline exports to Mexico will reach 3.8 billion cubic feet per day (Bcf/d) in 2018. This would be more than double U.S. pipeline exports to Mexico in 2013, which averaged 1.8 Bcf/d,” the EIA said.


Mexican power generation is presently dominated by fossil fuels, where natural gas has recently surpassed fuel oil and coal as the number one power source.

“Power plants using fossil fuels comprise the overwhelming majority of Mexico’s electricity generation. In the past, petroleum products were the leading fuels in Mexico’s electric generation mix. However, natural gas consumed for electricity generation has risen significantly in recent years, a shift that has been a leading driver of Mexico’s rising natural gas consumption,” said the EIA.

Non-hydro renewables are dominated by geothermal power, and supply only 3% of the country’s electricity.

“The most significant source is currently geothermal, including the 645-MW Cerro Pietro plant in Baja California, followed by biomass and waste combusted in fossil-fueled power plants. At present, there is relatively little wind and solar generation in Mexico.”

The country has strong wind resources in the west, in Baja California where there are plans for a transmission line to allow modest wind power exports to the United States.

“Sempra International is developing the Energía Sierra Juarez (ESJ) wind farm. The electricity from this farm will be exported to the United States on a new transmission line. The 156-MW first phase of ESJ will be completed in 2014. ESJ’s longterm development plan includes additional phases, with a potential total capacity of over 1.2 GW.”

There are also strong resources in the south of the country, in the Isthmus of Tehuantepec in Oaxaca, where the EIA noted several projects were due to come on line by early 2015 with several hundred megawatts of wind power capacity.

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