News
26/08/11
Mexico fracking report sets limits on development
Mexico City, 11 August (Argus) — A government-commissioned report evaluating
unconventional gas development in Mexico has recommended banning hydraulic
fracturing in the Tampico-Misantla basin and imposing strict water and
environmental safeguards elsewhere. President Claudia Sheinbaum created the
committee of 56 scientists and experts in April to assess whether Mexico can
safely develop its estimated 141.5 Tcf of unconventional gas resources using
newer hydraulic fracturing technologies while minimizing environmental and
social impacts. State-owned Pemex's 10-year strategy aims to lift unconventional
gas production from 20mn cf/d in 2026 to 1.159 Bcf/d by 2030 and 3.196 Bcf/d by
2035, part of government efforts to reduce dependence on US gas imports. Of the
141.5 Tcf in prospective gas identified by the report, 20.7 Tcf, or 15pc, are
located in the Tampico-Misantla basin, where the commission is ruling out
fracking. The report cites the region's higher population density, including
many indigenous communities, and highly biodiverse rainforests as reasons to
place Tampico-Misantla, situated in the central Huasteca region and Veracruz on
the Gulf, off limits. Industry sources also note the far greater geological
complexity of the basin's gas deposits. The remaining 85pc of resources are
found in two northeastern formations on the Texas border: the
Sabinas-Burro-Picachos formation, which spans Coahuila and Nuevo León, with 67
Tcf, 47.3pc, and 53.8 Tcf, with 38pc, in the Burgos basin, located in Tamaulipas
state and geologically tied to Texas' massively important Eagle Ford play across
the border. Sheinbaum said last week said that her government would accept the
panel's conclusions. The report also recommends prohibiting freshwater use for
fracking. Projects would instead need access to underground saltwater, typically
found at depths of 1,000-1,500m, with testing confirming hydraulic separation
from freshwater aquifers. At least 75pc of water used should be recycled or
reused. The debate will move to congress when the next legislative session
begins in September, where support is not guaranteed even within Sheinbaum's
Morena party. But the plan has gained backing from opposition figures, including
lower-house president Kenia Lopez. "Fracking must be considered as a means to
strengthen energy sovereignty, reduce foreign dependency and secure the energy
supply our country requires," Lopez said, while calling for strict
environmental, technical and regulatory safeguards. Projects would begin with
informed public consultations with nearby communities, followed by
hydrogeological and environmental studies to assess resources, profitability and
baseline conditions, including comprehensive mapping of water supplies.
Consultations should continue throughout development and operations. For the
Burgos and Sabinas-Burro-Picachos basins in northeastern Mexico, the panel
recommends focusing development on "sweet spots" combining the largest resources
with suitable hydrological conditions and technologies. Other recommendations
include independent scientific monitoring of aquifers, regional water use,
seismic activity and ecosystems; circular-economy waste management; preference
for local suppliers and gradual elimination of gas flaring. Sheinbaum aims to
raise domestic gas output from the current 4 Bcf/d to 5 Bcf/d by 2030. Even if
the plan advances, industry sources tell Argus it remains unclear how Pemex
would fund development or secure the technical expertise needed to meet its
unconventional gas targets. By James Young Send comments and request more
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