Day 3 of our on-going article excerpts. Check out the blog again on Monday for more, or head straight to our website for the remainder of the article.
Water Scarcity Could Deter Energy Developers From Crossing Border Into Northern Mexico
by Keith Schneider
Coahuila Says It’s Ready
Whether the shale gas fields of Coahuila and its neighboring states are included in the offering, though, is not certain. The national government has expressed concern about low gas and oil prices, and about security. Northern Mexico is the base of operations of “Los Zetas,” the most technologically advanced, sophisticated, and dangerous Mexican gang, which has infiltrated the state’s coal sector and terrorized several energy exploration teams.
The Governor of Coahuila, Rubén Moreira Valdéz, among the industry’s biggest boosters, is not intimidated. Moreira is pressing the national government to open bidding for development rights in his state to keep a promising oil industry job boom going. Earlier this year, during a shale development conference in Mexico City, Governor Moreira told attendees that “the economic development of shale oil and gas, and related investments, has generated more than 800 shale gas and shale oil jobs” in Coahuila.
The Duñas de Yeso are unique in Mexico and are often compared to the White Sands national monument in New Mexico. The dunes were formed over thousands of years by sand grains moved by the wind from deposits left on the banks of the Laguna Churince during its periodic ebb and flow. Since surface water on the lake has disappeared completely in the past few years, conservationists fear that this process has now been interrupted, with unpredictable consequences for this natural wonder and its unique bio system.
Executives of Pemex, Mexico’s national oil company, join administrators in Mexico’s Ministry of Energy in projecting much larger returns. Two years ago the U.S. Energy Information Administration estimated that northern Mexico reserves held 13 billion barrels of shale oil and 600 trillion cubic feet of natural gas, ranking the region as one of most potentially productive shale energy zones on the planet.
Pemex anticipates that the oil and gas producing basins of Coahuila and neighboring Nuevo Leon could attract over $US 100 billion in investment to drill 8,000 to 10,000 oil and gas wells. Coahuila state authorities added that they expected $US 64 billion of that total to be invested in their state, and that 240,000 jobs would result. Earlier this year a report by the University of Texas at San Antonio, Universidad Autonoma de Nuevo Leon, Asociacion de Empresarios Mexicanos, and the Wilson Center’s Mexico Institute was similarly enthusiastic. The report asserted that Mexico is in an ideal situation to reap the benefits of unconventional extraction techniques.