Mexico: Will fracking save the oil industry?
Monica Showalter lays out a strong case to Credit The Fracking Revolution For Mexico’s Oil Reforms That Make North America The World’s Energy Superpower
Mexico’s reversal didn’t come a moment too soon. Since 2006, its energy production has fallen sharply from underinvestment due to a bad combination of zero foreign investment, which it shut out in 1938, and the state’s habit of draining Pemex for cash to finance a third of its own budget.
The low production is evident in its oil exports to the U.S., which have fallen from nearly 2 million barrels of crude a day in 2006 to less than 1 million in 2013. As U.S. oil rigs light up the Gulf of Mexico each night, the crude-rich Mexican side stays as dark as North Korea.
Mexico’s 75 years of poor policy created a lost opportunity. Oil had become a smaller and less significant part of its economy even as the technical advances of fracking were making the U.S. and Canada the new Saudi Arabia. But it might be able to catch up, as global demand, according to ExxonMobil’s 2014 energy outlook, is forecast to grow 35% by 2040.
Now the question remains what the divided house will make of it, and, as Enrique Krauze put it, take “the road to genuine prosperity and democracy.”