U.S. energy companies exported $3.7 billion of natural gas to Mexico last year, putting a huge dent in our $7 billion trade deficit with our southern neighbor. In the absence of environmental activists and policymakers blocking proposed pipelines and export terminals, our natural gas trade surplus with Mexico would be even higher.
Mexico’s economy is growing at a steady pace (2.4 percent), translating to steady growth in energy demand. By 2029, Mexico’s natural gas demand is expected to grow by 31 percent. At the same time, Mexican natural gas production is declining, dropping 10 percent during the past year.
Image courtesy of Pixabay.
Our growing natural gas trade surplus is bringing in tremendous wealth from south of the border. Our natural gas exports to Mexico are expected to double in just the next two years. This growing trade surplus and infusion of wealth is a model that can and should be emulated in our trade with other nations.
[For economic context, while policymakers debate whether and how to pay for a Mexican border wall, Mexico will be sending enough money in natural gas purchases every year to pay the estimated costs of a border wall.]
Most of the natural gas we sell to Mexico is delivered through pipelines. Currently, 17 pipelines deliver natural gas to Mexico and another four are under construction. Nevertheless, Mexican demand is so high that we don’t have enough pipelines to deliver all the natural gas Mexico would like to purchase. In 2016, for the first time, U.S. energy producers delivered significant quantities of natural gas to Mexico via liquefied natural gas (LNG) tankers.
Environmental activist groups like the Sierra Club are fighting construction of new pipelines, even though natural gas imports from the United States will generate cleaner electricity than the oil- and diesel-generated electricity that is still prevalent in Mexico. Such opposition seems shortsighted and a knee-jerk reaction against anything related to fossil fuels.
The construction of more pipelines will bring more wealth to the American economy. It will reduce our national trade deficit. It will improve air quality in Mexico. It is a win-win-win for all parties involved.