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Mexico is becoming increasingly dependent on U.S.-produced natural gas to keep its lights on and its emissions low. a Mexican official told U.S. energy regulators in Washington Thursday at an all-day meeting on energy security.
`Natural gas supply is important for our power mix.` Marcelino Madrigal of the Mexican Energy Regulatory Commission told the U.S. Federal Energy Regulatory Commission. He explained that over 40 percent of Mexico`s `energy mix` in 2016 came from natural gas. and much of that was in the form of U.S. imports.
U.S. natural gas is rapidly becoming important to Mexico`s manufacturing industry. while helping to both control emissions and manage the power grid as more renewables are included in the country`s electricity mix. Madrigal told FERC. Natural gas is seen as a necessary back-up for wind and solar power plants. which provide off-and-on power supplies as the wind blows and the sun shines.
Mexico has maintained support for remaining in the Paris climate change agreement even after President Trump decided to withdraw from the deal. and called it bad for the U.S. economy. The U.S. is experiencing a 25-year-low in carbon dioxide emissions due to increased use of natural gas from fracking in electricity production.
Now it seems the lower emissions from natural gas will also benefit Mexico with its emissions.
The U.S. is a net exporter of energy to Mexico. The value of U.S. energy exports to Mexico was $20.2 billion in 2016. while the value of U.S. energy imports from that country was $8.7 billion. according to the Energy Information Administration. the U.S. Energy Department`s independent research and analysis arm.
`In 2016. national demand of natural gas was 7.78 [billion cubic feet per day]` of natural gas. Madrigal said. according to prepared remarks. He indicated that imports from the U.S. represented about 55 percent of total demand.
The increased dependence on U.S. natural gas imports is forcing the Mexican government to oversee a number of energy market reforms. including a natural gas energy security policy to ensure it has enough fuel on hand at all times. Madrigal explained.
`As our gas energy systems become more interconnected. more cooperation will be needed to improve how our markets and system can talk to each other on the commercial and technical fronts such as access rules.` he said. Recent market reforms in Mexico have seen increased interest in cross-border shipments of electricity. which will also require more coordination on cross-border transmission prices from the U.S.. he said.
It also means that Mexico will become even more closely intertwined with states` utility markets. especially in California and the Southwest.
The increased trade is also leading to more cooperation between Mexico and the U.S. government on grid security. including the signing of principles of cooperation in January.
`The objective of the principles is to promote the reliability and security of the interconnected electric power system in North America.` he said.
More recently. his commission and Mexico`s energy ministry signed a memorandum of understanding with the North American Electric Reliability Corporation. the U.S.`s grid security watchdog. to facilitate the exchange of `experiences and best technical and regulatory practices` on `physical infrastructure protection. cybersecurity. operation and planning with the integration of renewable energy.` among other areas. Madrigal said.
