The ongoing energy reform in Mexico has been touted as opening the possibilities for a massive production increase from shale formations in the Burgos and Sabinas basins, largely because the assessments of technically recoverable resources reported by the US Energy Information Administration are so substantial. But, we should be careful not to put the proverbial “cart in front of the horse.” Specifically, as the US success story shows, although the geology (the cart in this case) might be very promising, there are a number of above ground issues (the horse) that must be aligned for large-scale successes to be realized. Thus, it only seems fitting to begin looking for lessons for Mexico by posing an oft asked question, “What made the US energy renaissance possible?”First, to state the obvious, geology matters. The geologic scale of the technically recoverable oil and gas resources locked up in shale in Mexico and other regions is assessed to be very large. But, while necessary, the right geology is unfortunately not sufficient for successful upstream development. In fact, despite large assessments of shale oil and gas resources, in many locations outside the US production from shale formations is small to virtually nonexistent. This stark reality follows because a very unique set of market institutions and regulatory frameworks across the energy value chain that convey sufficiency for upstream development is missing in regions outside the US.via The US Shale Experience: A Script for Mexico?.
About The Author
December 13, 2013
- The United States and Mexico: Building and Designing Things Together – Forbes
- Made in Mexico: An emerging auto giant powers past Canada – The Globe and Mail
- How to Boost Border Competitiveness? Just Ask the Folks There.
- How Will Mexico’s Economy Perform in 2015?
- It’s Time To Reset U.S.-Mexico Relations – John M. Ackerman – POLITICO Magazine