Natural gas engines to power new plant

 

Wartsila's engines, the largest in the world. wartsila

 

 

mexiconewsdaily.com

Mexico News Daily | Saturday, May 2, 2015

 

A Finnish company has received final approval to build a 139-megawatt power plant in Nuevo León to supply power to Guatemala.

Wartsila Corporation will begin work immediately on the natural gas-powered plant, which will employ seven of the company’s 18-cylinder 50SG engines, the largest gas engine in the world.
 
Wartsila will supply 950 gigawatts of electricity a year to two utilities, Eléctrica de Guatemala and Energuate, exporting the power through Mexico. The plant is expected to begin operating next April, and will run at full output 24 hours a day to produce the required electricity.
 
The internal combustion engines were chosen for their reliability and fuel efficiency, regardless of extreme temperatures.

The project, to be built in Pesquería, near Monterrey, will double Wartsila’s capacity in Mexico to 280 megawatts.

“Mexico is a very interesting market for us,” said Raul Carral, Wärtsilä’s business development manager. “Flexible engine power plants can help optimize the power system by providing efficient peaking power and fast-reacting back-up for wind and solar energy. This can lead to significant savings.”

Wartsila was contracted by Energía del Caribe, which will be the plant’s owner and operator. Financial details were not revealed.

Source: Stockhouse (en), Milenio (sp)
 

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Fenosa Wins Natural Gas Distribution Bid for Sinaloa

by Maureen Dietrich
24 Feb 15
mazmessenger.com

The most important savings will be for industries and agriculture.

The Spanish company Fenosa has won the bid to expand distribution of natural gas in central and south Sinaloa to 1.5 million inhabitants.

On Friday, the Energy Regulatory Commission gave the go-ahead to the company to distribute natural gas in Culiacán, Elota, Mazatlán and Navolato.

In October last year Fenosa also won the bid to for distribution in southern Sonora and northern Sinaloa towns of Ahome, Choix, El Fuerte, Guasave and Salvador Alvarado.

Coordinator for Sinaloa Strategic Projects, Francisco Labastida Gómez de la Torre, estimated the project would require 300 million pesos.

Speaking to media, he said Sinaloans will now use natural gas in place of LP gas and instead of paying 480 pesos to fill a 30 liter tank, he estimates the price will decrease by 30 or 40 percent.

This represents an important savings for the general population, he continued, but the most important is the savings for industries and the potential for attracting more agricultural industries.

He stated in theory Fenosa will begin investing this year so that at the end of the year, or early next year, distribution will begin. Obviously, said Gómez de la Torre, the first city to receive natural gas will be Los Mochis and eventually it will be piped to other large cities in Sinaloa.

(from Noroeste)

Contract to extend natural gas network

 

 

 

 

 

 

Mexico News Daily | Thursday, October 23, 2014

A contract awarded yesterday will see natural gas available for the first time in the country’s northeast.

The natural gas distribution network will be enlarged to take in seven municipalities in Sonora and Sinaloa.

The Energy Regulatory Commission gave the contract to Gas Natural Fenosa of Spain, which will invest US $14.5 million over five years in pipelines and facilities that will deliver gas to a potential market of 500,000 customers.

The municipalities are Cajeme and Navojoa in Sonora and Ahome, Choix, El Fuerte, Guasave and Salvador Alvarado in Sinaloa. The company said the area is in the heart of one of the country’s richest agriculture regions, where industrial energy demands are strong.

The project will entail the installation of 500 kilometers of pipelines.

Gas Natural Fenosa delivers gas to more than 1.3 million customers in eight states in Mexico, with a distribution network of about 16,000 kilometers.

Source: Notimex (sp)

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CFE readies 2 more pipeline projects

CFE chief Enrique Ochoa.RED POLITICA

 

 

 

 

 

 

 The lines will carry natural gas from Texas to the border

 

Mexico News Daily 

Wednesday, September 10, 2014

 

 

Two of the five pipeline projects planned this year by the Federal Electricity Commission (CFE) are almost set to go to tender.

Yesterday, the CFE outlined the two projects to investors at a meeting in Houston, Texas, in preparation for a Request for Proposals due to be issued in the coming weeks.

The pipelines will carry natural gas from Waha, Texas, to the Mexican border, where they will link up with other lines to move the gas south. One is a 277-kilometer line to San Elizario and the other will run 230 kilometers to Presidio.

Cost for both pipelines is estimated at US $945 million.

The other three projects are a 254-kilometer line from Ojinaga to El Encino in Chihuahua, El Encino to Laguna in Durango and Ehrenberg, Arizona, to San Luis Río Colorado in Sonora.

Total cost of the five projects is estimated at $2.5 billion, and all are expected to be completed between 2015 and 2017. Once up and running, CFE will begin selling natural gas to the private sector, a first for the commission and a business opportunity permitted through the energy reforms.

Industrial users will be the primary market for the gas, CFE chief Enrique Ochoa told Reuters earlier this year, along with electrical generation as the commission moves away from burning fuel oil. Current generation capacity is 54 gigawatts, half of which is produced with natural gas and one-fifth with oil.

Ochoa said CFE also wants to produce more power from renewable sources. Ochoa said wind, solar, geothermal and especially hydroelectric sources will grow fastest.

Sources: Reuters (en), CNN (sp)

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AES plans $1 billion investment in Mexican power generation

BY DAVID ALIRE GARCIA

reuters.com

MEXICO CITY Fri Aug 1, 2014

(Reuters) - U.S.-based power company AES Corp plans to invest at least $1 billion to double its existing electricity generation capacity in Mexico, and also intends to enter the country's new wholesale power market.

Juan Ignacio Rubiolo, head of AES's Mexican unit, said in an interview on the sidelines of a trade mission this week that the company expects to benefit from sweeping energy reform and grow beyond its three existing power plants, which generate a combined 1,050 megawatts.

"We have a target of doubling the capacity we have in Mexico," said Rubiolo, noting that the company's focus is on plants powered by natural gas.

He said the company expects to invest at least $1 billion over the next three to five years to achieve the target.

AES (AES.N) is active in power generation and distribution in 20 countries and had revenue of $15.9 billion last year.

Rubiolo, previously AES's top executive in Panama, said the company is also looking to enter a newly created wholesale power market in Mexico.

"That's one of the major changes of the reform," said Rubiolo. "It's definitely one of our main targets."

The country's Congress is putting the finishing touches on an energy overhaul that ends the wholesale monopoly held for decades by national power company CFE [COMFEL.UL].

Final approval of so-called secondary laws that are needed to flesh out the fine print of last year's energy reform is expected in August.

Rubiolo said the company is closely following the creation of a new independent system operator and that body's independence from the CFE, as well as access to technical data and transparency rules.

He emphasized that the post-reform pace of growth in new power generation will depend largely on access to natural gas.

"We would like to be more comfortable with how they're going to allow private investors to get access to gas and pipeline capacity," he said.

(Reporting by David Alire Garcia)

Mexico's Energy and Telecom Reforms Come Into Focus

forbes.com

By Dwight Dyer

MEXICO CITY – The passage of President Enrique Peña Nieto’s reform agenda last year was a watershed moment for Mexico’s government, representing the most significant change to the country’s governance since the election of VicenteFox in 2000 ended decades of single-party rule. Yet the true extent of the reforms remains very much unknown. Although the constitutional amendments passed last year represented agreements to reforms in principle, the nuts and bolts of the actual reform must still be hashed out in a wave of secondary legislation. As I’ve written before, the devil is in the details.

Some of those details are now coming into focus for two of the most significant areas of reform: telecommunications and energy. The secondary legislation governing telecoms reform was signed into law on July 14, and legislation implementing the energy reforms is not far behind.

Initial reaction to the telecoms laws was mixed. On the one hand, critics charge that the new laws do not go far enough to encourage competition. Under the new system, government regulators can only block acquisitions or takeovers that would put more than half the market share in control of a single company. Skeptics suggest the result will be a duopoly: a market dominated by two powerful companies, each controlling just under half the market.

Proponents of the telecom reform point to its immediate benefits. Costs for some services, like mobile phone roaming, have already gone down. Access to other services has improved, for instance, restricted TV subscribers now have access to open air broadcast channels. Whether services improve in the long term remains an open question.

In many respects the telecoms reforms are a warm up to the much more eagerly anticipated energy reforms, which promise to open Mexico’s potentially lucrative oil and gas reserves to foreign investment for the first time in decades. The energy legislation is currently under debate in Mexico’s Senate, but already some basic contours have emerged.

One of the more controversial topics under debate is the potential for a provision allowing the Mexican government to expropriate privately owned land for oil and gas exploration. The language of that provision appears to have softened to make such appropriations temporary and ensure profit sharing with land owners, though the limits of any such provision are sure to be tested in the courts.

Another detail to emerge from the negotiations is an apparent agreement to restrict foreign investment in midstream activities. Foreign investment in overland distribution appears likely to be blocked, and foreign companies will be limited in the degree to which they can supply fuel to ships, airplanes and railroads. Such protections would make midstream activities more lucrative for Mexican companies. There will be no restrictions to foreign investment in pipelines, however, which will likely spur a considerable expansion of the country’s pipeline infrastructure.

In a particularly positive sign, the proposed legislation contains checks and balances that will limit the president’s ability to manipulate the management of state-owned energy companies. Any nominations or dismissals to those companies’ executive boards will need to be approved by a two-thirds vote in the Senate. Indeed, greater transparency and insulation from political interference may be the most important effects of the reforms in both the telecom and energy sectors. Intense competition and widespread foreign investment seem less likely in the short-to-medium term, but even so, clarity on the exact contours of the reforms is likely to bolster investors in both sectors.

Mexico announces Coyanosa-to-Ojinaga pipeline

bigbendnow.com

June 12th, 2014 

MEXICO CITY – Mexican authorities have announced plans build five new natural gas pipelines, including one from the Texas Permian Basin to Ojinaga, Chihuahua, Mexico, according to the Latin America Herald Tribune.

Enrique Ochoa, chief executive officer of La Comision Federal de Electricidad (CFE), or federal electricity commission, said in a statement that the state-owned electric utility and the energy secretariat will oversee the project valued at about $2.5 billion.

Ochoa said at a recent energy and gas forum at the CFE’s Technological Museum that the first gas pipeline would cost around $400 million and run from Ojinaga to El Encino in the northern state of Chihuahua.

The second conduit will stretch from El Encino to the Laguna zone in the state of Durango, while the third will transport gas from Waha, Texas, to Samalayuca, Chihuahua. The Waha oil and gas field and collection area  is located near the Pecos County farming community of Coyonosa.

A fourth gas pipeline will run from Waha to Ojinaga and the fifth will stretch from Ehrenberg, Arizona, to San Luis Rio Colorado, Sonora, Mexico.

Mexico is looking to build more pipelines to boost the “reliability of the country’s natural gas transport system,” Ochoa said.

Deputy Electricity Secretary Cesar Hernandez said the CFE has experience working with the private sector on natural gas transport infrastructure projects, which he added would give Mexicans access to that fuel “at competitive prices.”

Under the energy sector overhaul it adopted last December, the administration of Mexico President Enrique Peña Nieto plans to boost natural gas output from a current level of 5.7 billion cubic feet per day to 8 billion cfd by 2018 and to more than 10.4 billion cfd by 2025.

That higher production would enable Mexico to be an exporter as opposed to an importer of natural gas.

It would also for the first time bring natural gas to the border communities of Presidio, Texas and Ojinaga, Mexico, opening economic development opportunities for manufacturing plants and facilities.

So far, there’s been no indication of where the pipeline is to be sited.

Bonfil Industrial Park Readies for Introduction of Natural Gas

by Maureen Dietrich

30 May 14 

mazmessenger.com

 

In anticipation of the new natural gas pipeline to Mazatlán slated to be operational in 2016, several companies located in the Bonfil Industrial Park contracted to install distribution lines to their locations and report the project is fifty percent completed.

The companies with forethought which hired Gas Natural Industrial SA de CV to install the pipes include Pescados Industrializados SA de CV, Café El Marino, Bimbo and Pacífico Beer.

The next order of business, said the industrial park’s administrator Francisco Castillo López, is to petition the municipal government to direct the Torreón contractor to acquire an insurance policy against hidden risks. According to the contractor’s certificate, the company is required to maintain and protect the lines for only six months after completion of the project.

 (from Noroeste)

Work Begins on Gas Pipeline

by Maureen Dietrich

29 May 14 

mazmessenger.com

 

Topolobambo: With an investment of 5,300 million pesos, the gas pipeline in Sinaloa will be operative by December 1, 2016, according to estimations by the coordinator of strategic projects in Sinaloa, Francisco Labastida Gómez.

At the signing of the agreement between the Comisión Federal de Electricidad, the Sinaloa government and the company Transportadora de Gas Natural de Noroeste, Labastida Gómez announced once the pipeline is operational Sinaloa will have 400 million cubic feet of natural gas daily, signifying a savings of 1,000 million pesos daily.

The company constructing the pipeline, Transportadora de Gas Natural del Noroeste, is affiliated with the Canadian company Transcanada which will administer the project.

The natural gas, he stated, will originate in the United States and be conducted by five lines, two to Sonora, two through Chihuahua and one to Sinaloa. The Sinaloa line will be connected at San Blas in the municipality of El Fuerte and from there will connect to Mazatlán.

 (from Noroeste)

Last of Gas Pipeline Arrives from India

 by Murry Page

20 May 14 

mazmessenger.com

 

Francisco Labastida Gomez, General Coordinator of Strategic Projects for Sinaloa, said that the last of the pipeline needed for construction of the natural gas pipeline to Mazatlán has arrived.

The 8,636 pieces of pipeline began to be offloaded at Mazatlán’s docks on Sunday for the North-Northwest pipeline.

The pieces of pipeline for the project began arriving last October and the Sunday delivery brought the total number of pipeline segments to 28,235.

The pipe will be sent to a holding area in Guasave, where it will be disbursed, as needed for the construction of the pipeline from El Fuerte to Mazatlán.

(from Noroeste)

Gas Pipeline Construction to Begin in Mazatlán in Two Weeks

by Murry Page

16 May 14

mazmessenger.com

 

Francisco Labastida Gómez, Director of Strategic Projects for the state of Sinaloa, said that pipeline segments for the construction of the natural gas pipeline will start coming into Mazatlán within the next two weeks. He said that hiring of the labor needed for the construction of the pipeline will begin immediately.

He said that the pipeline presents a $15 billion investment of which $1.2 billion will remain in the state.

Francisco Labastida said that when the gas pipeline is completed the residents of Sinaloa will have cleaner gas and that electric rates should drop by about 25 percent.

He said, “In a few weeks you will begin to see truckloads of pipes.”

(from El Debate)

Mexico Announces Plans for 5 New Natural Gas Pipelines

laht.com

MEXICO CITY – Mexican authorities said on Tuesday they would hold auctions in the near future for five new natural gas pipelines, which are to be built at a cost of $2.25 billion.

The CEO of Comision Federal de Electricidad (CFE), Enrique Ochoa, said in a statement that the state-owned electric utility and the Energy Secretariat would provide details on the bidding processes in the coming days.

Ochoa said at an energy and gas forum at the CFE’s Technological Museum that the first gas pipeline would cost around $400 million and run from Ojinaga to El Encino in the northern state of Chihuahua.

The second conduit will stretch from El Encino to the Laguna zone in the state of Durango, while the third will transport gas from Waha, Texas, to Samalayuca, Chihuahua.

The fourth gas pipeline will run from Waha to Ojinaga and the fifth will stretch from Ehrenberg, Arizona, to San Luis Rio Colorado, Sonora, Mexico.

Mexico is looking to build more pipelines to boost the “reliability of the country’s natural gas transport system,” Ochoa said.

Deputy Electricity Secretary Cesar Hernandez said the CFE has experience working with the private sector on natural gas transport infrastructure projects, which he added would give Mexicans access to that fuel “at competitive prices.”

Under the energy sector overhaul it adopted last December, Mexico aims to boost natural gas output from a current level of 5.7 billion cubic feet per day to 8 billion cfd by 2018 and to more than 10.4 billion cfd by 2025.

That higher production would enable the Aztec nation to be an exporter as opposed to an importer of natural gas.

Mexico launches 2nd phase of $2.5 bn gas pipeline project

globalpost.com


Mexico City, Mar 28 (EFE).- Mexican authorities inaugurated the second phase of a project to build the $2.5 billion "Los Ramones" gas pipeline, which will stretch for 1,021 kilometers (635 miles) from the U.S.-Mexico border to the central state of Guanajuato.

Energy Secretary Pedro Joaquin Coldwell, Environment Secretary Juan Jose Guerra and the CEO of Mexican state-owned oil giant Petroleos Mexicanos, Emilio Lozoya, were on hand for the ceremony, Pemex said in a statement.

The conduit, hailed as one of the country's most important infrastructure projects of the last four decades, will boost the capacity of the nation's gas pipeline system and guarantee the supply of cheap natural gas imports from the United States to industrial consumers in central and northeastern Mexico.

Thurday's inauguration ceremony was held at the Los Ramones compression station, which is owned by Pemex's gas and basic petrochemicals unit and located along the Reynosa-Monterrey highway.

The pipeline, which will run from Camargo, Tamaulipas - across the border from Rio Grande City, Texas - to Guanajuato and meet nearly 20 percent of Mexico's natural gas demand, is scheduled to begin operating in December 2015.

The project is essential for increasing the availability of natural gas at competitive prices, "substantially alleviating existing bottlenecks," Lozoya said.

"These types of projects guarantee that Mexico will be a part of North America's energy revolution," he added.

Guerra added that Los Ramones will contribute to the production of cleaner and more environmentally friendly fuels.

Phase 1 of the project, currently under construction, encompasses an area stretching from the U.S.-Mexico border to Los Ramones, a municipality in the northeastern state of Nuevo Leon, while phase 2 covers the southern stretch of the pipeline to Guanajuato

February 17, 2014 By Marita Noon

conservativeactionalerts.com

What does Mexico’s president know that President Obama doesn’t?

It is not often that Americans look south of the border for solutions, but Mexico’s President Enrique Peña Nieto seems to have figured out a few things in his first year of power that has, in six years, eluded Obama.
Late last month, Peña Nieto spoke at the World Economic Forum in Davos, Switzerland.  There, he highlighted his first-year achievements: “a legislative consensus with the two major opposition parties on the transformations and structural reforms that the country needed,” reports Mexico City’s The News. He pointed out that this has been achieved “in a climate of plurality and diversity.”

A few months ago, with great enthusiasm, I wrote about Peña Nieto’s proposed energy reforms—something his predecessor had been unable to achieve. (President Felipe Calderon’s critics believed his proposals violated the constitution.) The reforms passed on December 12, 2013, amend Articles 25, 27 and 28 of Mexico’s constitution to allow profit- and production-sharing contracts, and licenses. The reforms also put an end to government monopolies in the operation of oil-and-gas fields, while maintaining the Mexican government’s ownership of the country’s resources.

“The current government’s ability to build coalitions puts Mexico on the verge of its biggest economic victory since the North American Free Trade Agreement,” states Arturo Sarukhan, who has served in Mexico’s Foreign Affairs Ministry.

The reform is important because one third of Mexico’s federal budget—including healthcare, schools, and infrastructure—comes from oil wealth that has declined 25 percent since its peak just a decade ago. It has the potential to transform Mexico’s economy by inviting foreign investment, which Peña Nieto successfully argued is needed to “allow Mexico to capitalize on its shale oil-and-gas deposits.” Because almost all of the profits of Mexico’s state-owned oil company, Pemex, have gone back into the national coffers—and not into research and development—Mexico lacks the technical expertise to exploit its unconventional resources and deep-water deposits. Even in Mexico, the era of easy oil is over.

Fluvio C. Ruiz Alarcon, an independent director at Pemex, explains: “It will be vital to improve its technological competencies if Pemex is to remain competitive. It will need firm partnerships with companies from other countries.” He adds: “Pemex will need to change from a public entity to a productive state enterprise.”

Not everyone is happy. The day the reforms were signed, protesters pounded on metal barriers with rocks and spoons. Riot police stood guard. Inside, Reuters reported: “Critics lamented the energy reform as an act of submission and the end of an era, tapping into the pride many Mexicans still feel over President Lazaro Cardenas’ move to expropriate foreign oil companies’ assets in 1938 and create Pemex.” More than 1.6 million signatures have been gathered on a petition demanding a referendum on energy reform.

Sarukhan believes “There will be challenges.” He says: “One will be making sure the victory which has been won can be translated into public opinion. Privatization is still a dirty word to many people. … The devil will be in the details, which will be worked out in the next few months.”

In a thorough discussion of the topic, titled: “Mexico’s energy reforms: can Mexico emerge as a prime global oil & gas industry expansion prospect?” Roman Kilisek posits: “Here a difficult balancing act needs to be struck: Mexico has to offer international companies attractive enough returns on capital employed to make them willing partners in developing its oil and gas wealth while retaining good enough ‘equity stakes’ in joint projects to benefit and placate Mexicans.”

The critical phase of drafting the laws to implement December’s energy reform bill began February 1. These laws will spell out the terms and conditions for foreign international oil companies to explore and develop Mexico’s deep-water and shale resources. OilPrice.com reports: “Mexican Congress has 12 months to develop energy-related environmental regulations and to establish the National Center of Natural Gas Control and the National Energy Control Center.”

Peña Nieto’s energy reforms are not a sure thing, but he understands how important developing Mexico’s energy resources are to economic growth—something that seems lost to Obama.

In his Davos comments, Peña Nieto said that Mexico is committed to “conditions of security and legal certainty.” And that “we’re seeking to be more competitive.” These attitudes, combined with the ability to “build coalitions” should offer lessons to President Obama.

Another thing that could be learned from Peña Nieto is that lower energy prices are the key drivers of economic growth. His energy reform also tackles electricity.

While most of the focus on Mexico’s energy reform has been on the oil-and-gas sector, Peña Nieto’s plans also end the monopoly held by the national utility CFE. Mexico’s manufacturing and commercial customers currently pay a surcharge for electricity, while residential, agricultural and service industry users’ rates are subsidized.  Barclay’s Marco Oviedo, points out: “Mexican industry this year has paid 45 percent more for its electricity than factories in the U.S.”  Even though residential customers’ rates are subsidized, they are still, according the Financial Times: “Among the highest in the 34-member Organization for Economic Co-operation and development.”

Francisco Salazar, head of CRE, the country’s regulatory energy commission, has called the high price of electricity in Mexico: “a deterrent to investment.”

Reuters reports:  About half of Mexico’s current electricity is generated from natural gas, up dramatically since 2000, when costlier, dirtier fuel oil was the major electricity fuel.” Despite its vast, albeit inaccessible with Pemex’s current technology, supplies—estimated to be one of the world’s largest shale gas resource bases—Pemex is building pipelines to bring cheap U.S. shale gas into Mexico. The Los Ramones natural gas pipeline will bring natural gas from Texas’ Eagle Ford shale—which extends into Mexico and may be even bigger than the portion on the U.S. side of the border—into Mexico’s industrial heartland. Kilisek believes that it will take years for Mexico to unlock those reserves, “while facing a severe natural gas shortage in the meantime.” He says that by the time the Los Ramones pipeline is finished, “natural gas demand will have already outstripped the pipeline’s capacity.” To meet the demand, Pemex is importing Liquefied Natural Gas at more than five times the price of gas in the U.S.  Rafael Ch, an energy researcher with Mexico’s CIDAC think tank, says: “The main problem is that we just don’t have the capacity to meet our future electricity demand.”

Peña Nieto understands the need to build pipelines to bring the needed supplies into the country. Meanwhile, in America, we’ve been waiting for five years for the Obama administration to approve the Keystone pipeline. Peña Nieto understands that lower energy costs will help his country be competitive. Obama’s policies have increased electricity prices—both residential and industrial—in the U.S.

Having just spent the past week in Mexico, where I observed many impoverished communities, I am keenly aware of the need for Mexico to lift its standard of living and increase economic growth, which Peña Nieto understands energy can provide. As America’s economic numbers slip, this, too, is a lesson Obama needs to learn.

Richardson sees trade spike soon

Wednesday, 12 February 2014 00:10 
BY KELLY ARTHUR GARRETT
The News


When former New Mexico Governor and U.S. Energy Secretary Bill Richardson returned to the Mexico City of his boyhood this week, he emphasized Mexico’s role as a growing economic player in the hemisphere.

“Mexico is the sexy country in the world right now — de veras,” he said. “You go to a conference and everybody wants to know about Mexico. I like to hear that. It makes me feel proud.”

That pride is no mere gesture to a friendly neighbor. Richardson’s mother was Mexican, and though he was born in the United States, he was raised in Mexico until age 13, when he was sent to boarding school in Massachusetts. Years later, as a member of the U.S. House of Representatives, he was a staunch supporter of a more respectful relationship with his former country of residence at a time when few in Congress saw things his way.

“For years, all I’d hear from my colleagues was that Mexico was a third world country, that it was corrupt, that nothing happened there except violence,” said Richardson, 66. “I got sick of all that.”

The former governor, who vied for the Democratic presidential nomination in 2008 against Hillary Clinton, Joseph Biden and eventual winner Barack Obama, was an early supporter of the North American Free Trade Agreement (NAFTA), which he considers the beginning of Mexico’s economic maturity, as well as its improved image and growing trade with the United States.

“Today I see the the relationship between Mexico and the United States to be on a more equal footing,” he said. “It’s not just about security. It’s about commerce, economic development, technology transfers, student exchange, regional issues.”

He sees Mexico’s economic growth as set to take off, and credits the recent reforms promoted by President Enrique Peña Nieto, with whom he has a friendly relationship as paving the way for that expected growth.

“I’m pro-Mexico and pro-this president,” he said, referring to Peña Nieto. “There’s going to be a real spike in trade and commerce because of the energy and telecommunications reforms especially. And that means jobs for both countries.”

Richardson praised Peña Nieto, with whom he has a friendly relationship, for taking the political risk of pushing through the energy reform against opposition concerns that it would jeopardize national sovereignty while possibly giving away Mexico’s oil patrimony to the private sector.

“It’s not privatization,” Richardson insisted. “Nobody’s going to steal Pemex. That’s not going to happen.”
What it is instead, according to Richardson, is the beginning of a more productive energy policy. “There will be more renewable energy,” he said. “There will be more deep sea drilling and shale gas, which if done properly will be environmentally suitable. There will be Mexican capital investing in Mexican energy, and I think that is an important potential development.”

Richardson, who served as the U.S. ambassador to the United Nations during the Bill Clinton administration, said he sees Mexico assuming more of a hemispheric leadership role in the near future.

“Right now our (the United States’) relationship with countries like Ecuador, Venezuela, Nicaragua and Bolivia are not as good as they should be,” he said. “Mexico has a great tradition of diplomats. It could serve as a bridge to a more united hemisphere.”

The next step, he said, could be Mexican leadership on a global scale. “In 20 or 25 years, Mexico should consider pushing for a seat on the United Nations Security Council alongside the world’s great powers,” he said.

Mexico to see $10B per year in oil revenues from industry reforms

bizjournals.com
Mark Yost - Reporter- Houston Business Journal

Mexico expects to see about $10 billion more a year in revenues from the privatization of its oil industry.
"We expect these reforms to result in an increase of 1 percent to GDP by 2018 and an added 2.5 percent of GDP by 2025," said Maria de Lourdes Melgar Palacios, undersecretary of hydrocarbons in the Mexican Ministry of Energy.

Speaking at a seminar Friday morning at the Four Seasons Hotel Houston hosted by the University of Texas at Austin and the Atlantic Council, Palacios also said that while the focus of the privatization is on the oil and gas industry, increasing Mexico's reliance on renewable energy will also be a major focus of the landmark legislation currently being crafted in Mexico City.

"Renewable energy is a priority," she said.

She said that Mexico has a climate change goal to reduce emissions by 20 percent by 2020 and by 30 percent by 2050. Mexico has also set a goal to reduce its reliance on fossil fuels to 65 percent by 2024, down from about 85 percent today. She also said that last year Mexico set up a carbon tax that applies to all fossil fuels and is creating a regime for trading carbon credits.

Palacios said that in terms of renewables, Mexico has "incredible potential in wind, geothermal and solar, as well as small hydroelectric power plants."

She noted that Mexico used to be the world's biggest producer of geothermal power but is now fourth.
"We're making a real push in geothermal, which is unique from other renewables in that you have to do E&P (exploration and production), which is similar to oil and gas production."

She said that Mexico is currently partnering with companies that have developed geothermal fields in other parts of the world, but it needs to build more plants and partnerships to get geothermal power from the field to homes and businesses.

In terms of financing, Palacios said that Pemex, the state-owned oil company, funds about 30% of the federal budget today, or about 4.7 percent of GDP. Under the reforms, Pemex will be privatized but will continue to provide that level of funding to the government through taxes and royalties.

"The ministry of finance is trying to have a neutral budget effect" in terms of Pemex and how much it contributes to the Mexican budget, Palacios said.

Mexico's estimates for growing GDP over the next decade and the $10 billion a year it expects to earn from privatization come from what it expects to collect in taxes and royalties from private companies from the U.S., many of them based here in Houston, and elsewhere that will come into a deregulated Mexican oil and gas market.

She said that foreign companies are starting to submit bids and proposals to move into Mexico, but she doesn't expect the first contracts to be awarded before 2015.

A recent economic impact study from Morgan Stanley's Houston office estimated that overall direct and indirect investment from the deregulation of the Mexican oil and gas industry could be $1 trillion when you add up oilfield investment, infrastructure improvements, and jobs and peripheral industries such as housing, restaurants, hotels and the like along the Texas-Mexico border in the Eagle Ford shale play.