mexico energy reform

TransMexico? Keystone XL Owner TransCanada Wins Bid For Underwater Gas Pipeline Across Gulf of Mexico

Read time: 4 mins

TransCanada, owner of the proposed Keystone XL pipeline currently being contested in federal court and in front of a North American Free Trade Agreement (NAFTA) legal panel, has won a $2.1 billion joint venture bid with Sempra Energy for a pipeline to shuttle gas obtained from hydraulic fracturing (“fracking”) in Texas' Eagle Ford Shale basin across the Gulf of Mexico and into Mexico.

The 500-mile long Sur de Texas-Tuxpan pipeline, as reported on previously by DeSmog, is part of an extensive pipeline empire TransCanada is building from the U.S. to Mexico. The pipeline network is longer than the currently operating southern leg of the Keystone pipeline (now dubbed the Gulf Coast Pipeline).  Unlike Keystone XL, though, these piecemeal pipeline section bid wins have garnered little media attention or scrutiny beyond the business and financial press. 

Exposed: ExxonMobil Funding Influential Columbia University Center on Global Energy Policy

Read time: 3 mins

In a sentence buried at the very bottom of a story making headlines nationwide, Politico revealed for the first time one of the funders of Columbia University's influential Center on Global Energy Policy (CGEP).

The funder: ExxonMobil, the company embroiled in a New York state Attorney General investigation for its extensive internal knowledge of the impacts of climate change since the 1970s, followed by Exxon's funding of climate change denial campaigns to the tune of $31 million. Politico got its numbers from ExxonMobil's 2014 Worldwide Contributions and Community Investments report.

TransCanada's Next Move After Keystone XL: Flood Mexico with Fracked Gas with State Department Help

Read time: 3 mins

TransCanada, the owner of the recently-nixed northern leg of the Keystone XL tar sands pipeline, has won a bid from Mexico's government to build a 155-mile pipeline carrying gas from hydraulic fracturing (“fracking”) in the United States to Mexico's electricity grid. 

The company has benefited from Mexico's energy sector privatization promoted by the U.S. State Department, the same agency that denied a permit to the U.S.-Canada border-crossing Keystone XL. TransCanada said in a press release that construction on the $500 million line will begin in 2016 and it will be called the Tuxpan-Tula Pipeline. 

Winner of Mexico's First Offshore Oil and Gas Bid Had Massive Gas Drilling Leak in 2013

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The company that won the first-ever bid in the oil and gas privatization era for Mexico — earning the right to tap into two designated blocks in the country's shallow water coast of the Gulf of Mexico — leaked 252 gallons of a liquid form of raw natural gas into the Gulf in a July 2013 shallow-water accident off the coast of Louisiana.

Talos Energy, the Houston, Texas-based company responsible for the spill, won the July 15 bid and will do the drilling in a joint venture alongside Sierra Oil & Gas and Premier Oil.

The leak — producing a self-described “rainbow sheen…more than four miles wide by three quarters of a mile long” — transpired on an inactive well formerly owned by the company Energy Resources Technology, which Talos bought as a wholly-owned subsidiary earlier that year. 

Exclusive: Hillary Clinton State Department Emails, Mexico Energy Reform and the Revolving Door

Read time: 14 mins

Emails released on July 31 by the U.S. State Department reveal more about the origins of energy reform efforts in Mexico. The State Department released them as part of the once-a-month rolling release schedule for emails generated by former U.S. Secretary of State Hillary Clinton, now a Democratic presidential candidate.

Originally stored on a private server, with Clinton and her closest advisors using the server and private accounts, the emails confirm Clinton's State Department helped to break state-owned company Pemex's (Petroleos Mexicanos) oil and gas industry monopoly in Mexico, opening up the country to international oil and gas companies. And two of the Coordinators helping to make it happen, both of whom worked for Clinton, now work in the private sector and stand to gain financially from the energy reforms they helped create.

The appearance of the emails also offers a chance to tell the deeper story of the role the Clinton-led State Department and other powerful actors played in opening up Mexico for international business in the oil and gas sphere. That story begins with a trio.

Open for Business: First Major Deal Since Energy Reforms Will Bring Fracked Gas to Mexico

Read time: 3 mins

For the first time in 76 years, a piece of Mexico’s oil and gas infrastructure has been sold to a foreign investor, and the deal will help bring fracked gas from Texas’s Eagle Ford shale region into Mexico. In this first major deal since the country’s landmark energy reforms, Pemex—the state-owned oil company that had kept domain over the country’s vast petroleum and natural gas reserves since they were nationalized back in 1938—sold a 45-percent stake of a prospective natural gas pipeline project to the United States-based investment funds BlackRock and First Reserve.

Days Before Obama Announced CO2 Rule, Exxon Awarded Gulf of Mexico Oil Leases

Read time: 4 mins

On Friday May 30, just a few days before the U.S. Environmental Protection Agency announced details of its carbon rule proposal, the Obama Administration awarded offshore oil leases to ExxonMobil in an area of the Gulf of Mexico potentially containing over 172 million barrels of oil.

The U.S. Department of Interior's (DOI) Bureau of Ocean Energy Management (BOEM) proclaimed in a May 30 press release that the ExxonMobil offshore oil lease is part of “President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production.” 

Secretary of Interior Sally Jewell formerly worked as a petroleum engineer for Mobil, purchased as a wholly-owned subsidiary by Exxon in 1998.

Dubbed a “Private Empire” by investigative reporter Steve Coll, ExxonMobil will now have access to oil and gas in the Alaminos Canyon Area, located 170 miles east of Port Isabel, Texas. Port Isabel borders spring break and tourist hot spot South Padre Island.


Map Credit: U.S. Bureau of Ocean Energy Management

ExxonMobil originally won the three leases at the Western Planning Area Sale 233, held on March 19. BOEM records show ExxonMobil was the only company to participate in the bid and paid over $21.3 million.

"No Turning Back:" Mexico's Looming Fracking and Offshore Oil and Gas Bonanza

Read time: 16 mins

After generations of state control, Mexico’s vast oil and gas reserves will soon open for business to the international market.

In December 2013, Mexico’s Congress voted to break up the longstanding monopoly held by the state-owned oil giant Petroleos Mexicanos — commonly called Pemex — and to open the nation’s oil and gas reserves to foreign companies.

The constitutional reforms appear likely to kickstart a historic hydraulic fracturing (“fracking”) and deepwater offshore oil and gas drilling bonanza off the Gulf of Mexico.

“This reform marks a major breakthrough in Mexico’s economic history only comparable to the signing of the North America Free Trade Agreement (NAFTA) in 1992,” international investing and banking giant Banco Bilbao Vizcaya Argentaria (BBVAwrote in a January 2014 economic analysis.

What does this mean for the oil and gas industry in Mexico? And for the workers and those who live above these oil and gas plays or along the pipeline routes that will funnel the liquids to refineries? And how about for the Earth’s atmosphere?

Can Mexico’s fossil fuel infrastructure handle the boom? Can the country spare the precious freshwater supplies needed for thirsty fracking operations in an era of increasingly severe droughts and drinking water shortages? Can environmental, safety and public health regulations possibly keep up with this industrial boom?

DeSmogBlog will examine all these issues and more as Mexico opens its fossil fuel reserves to international exploitation in the weeks and months ahead. But, first, an overview of the state of play in Mexico’s energy reforms.

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