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19th November 2015
EDITOR
TransCanada threatens water and climate with pipeline expansion plans in Mexico

November 18, 2015 - 9:30am

n December 2013, the Mexican government passed an 'energy reform law' that means corporations can now explore and extract the vast oil and gas reserves in Mexico. Bloomberg described this as "the nation’s most significant economic reform since the North American Free Trade Agreement". In September 2014, the Globe and Mail reported, "Mexico’s state-owned development bank [Banco Nacional de Comercio Exterior SNC] is forging alliances with Canadian financial institutions to boost the stunted levels of commercial lending in the country, especially in the newly reformed energy sector where increased investment is sorely required."

Mexico City-based Blue Planet Project organizer Claudia Campero Arena has warned, "Most of the public debate on the 'energy reform law' was concentrated on whether or not bringing private companies to the game is in the best interest of the country. But we also need a much fuller public discussion on how are we going to wean ourselves off fossil fuels and deploy truly sustainable energy solutions." That's because oil production in Mexico is projected to increase from 2.5 million barrels a day now to as much as 4 million bpd by 2025. Natural gas production is also expected to increase from 5.7 billion cubic feet now to 10.4 billion cubic feet by 2025.

Today, Bloomberg reports, "TransCanada won the rights last week for its sixth pipeline in Mexico, one of the company’s key targets for growth. ...TransCanada’s expansion in Mexico coincides with the country’s overhaul of its energy industry that ended the state-run monopolies of the Comision Federal de Electricidad and Petroleos Mexicanos, opening the door to private investment. Mexico plans to expand its pipeline infrastructure 75 per cent by 2018 and is seeking as much as $10-billion in investment for 24 new projects in the short term, according to Enrique Ochoa, chief executive officer of the CFE, as the state-run utility is known."

Last week, La Prensa reported, "Canadian energy infrastructure company TransCanada Corporation said Wednesday [Nov. 11] that it had been awarded a contract to build, own and operate the Tuxpan-Tula Pipeline in Mexico, a project that will require an investment outlay of approximately $500 million. ...Construction of the gas pipeline, which is to stretch for approximately 250 kilometers (155 miles) and have contracted capacity of 886 million cubic feet per day, is expected to begin in 2016 and is supported by a 25-year natural gas transportation service contract with the CFE, Mexico's state electric utility."

The Bloomberg report notes, "The new 263-kilometer pipeline will carry natural gas from the coastal port town of Tuxpan to the central industrial hub of Tula, giving TransCanada what [TransCanada's president of Mexico operations Robert] Jones called 'a nice foothold' in a major natural gas market for the country. With the contract, the company now holds rights to develop and operate 2,000 kilometers of pipelines in Mexico, Jones said. TransCanada outbid billionaire Carlos Slim’s Grupo Carso SAB and Sempra Energy’s local unit, Infraestructura Energetica Nova SAB, for the project."

The Canadian Press adds, "The 250-kilometre pipeline will run from [Tuxpan, a city in] the state of Veracruz to natural gas power plants in central and western Mexico, supplying up to 886 million cubic feet of gas a day. ...By 2018, the company says it will have invested about $3 billion US in the country and continues to look for more opportunities in Mexico." In fact, Bloomberg reports, "Mexico is planning to hold as many as five pipeline auctions before the end of January, and [the] TransCanada [president of Mexico operations says the company] will 'look at them all'."

Increased fossil fuel extraction means more carbon emissions and more stress on Mexico's limited water supplies.

Mexico has the fourth largest reserve of shale gas in the world, an estimated 681 trillion cubic feet of it. The Inter Press Service (IPS) has reported, "According Mexico’s Energy Regulatory Commission ...fracking takes 7.5 million to 30 million litres of water per well to release the gas, while a field of 10 wells would need between 25 million and 40 million litres of water. ...[Mexico's state-owned petroleum company PEMEX] has not clarified where the water comes from [for its planned expansion of shale gas wells] or what is being done with the waste."

The Blue Planet Project, through its participation in the Mexican Alliance against Fracking (La Alianza Mexicana contra el Fracking), has called for a ban on fracking in Mexico. Campero is part of ongoing efforts to stop fracking in Mexico. On October 10, the Mexican Alliance Against Fracking released a video that features Julieta Venegas, Lumi Cavazos and Ruben Albarran explaining hydraulic fracturing and calling for a ban on it. A petition opposing fracking how now collected 22,701 signatures. Campero will also be at the COP 21 climate summit in Paris to highlight the threats posed by increased fracking and fossil fuel extraction.

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Brent Patterson's blog

http://canadians.org/blog/transcanada-threatens-water-and-climate-pipeline-expansion-plans-mexico