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The Impact of Natural Gas Imports on Air Pollutant Emissions in Mexico

This paper analyzes the impact that natural gas imports could have on fuel emissions in northern Mexico. We discuss the problem created in the 1980s when a shift from natural gas to residual oil in industrial processes increased emissions of air pollutants significantly. The benefits of substituting leaded for unleaded gasoline in the 1990s are discussed also.In July 1992 the Mexican government announced for the first time since oil nationalization that private companies in Mexico are allowed to directly import natural gas. The transportation of natural gas, however, remains reserved only for Pemex, the national oil company. This opens the possibility of reducing the burning of high-sulphur residual oil in both the industrial and the energy production sectors in Mexico, particularly in the northern region where only 6.7% of the of the country's natural gas is produced. Natural gas imports have also opened the possibility of using compressed natural gas (CNG) in vehicles in northern Mexico.

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Energy Specializations: Natural Gas – Markets and Prices; Natural Gas – Policy and Regulation; Energy and the Environment – Air Emissions (other than greenhouse gases)

JEL Codes:
L13 - Oligopoly and Other Imperfect Markets
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
Q52 - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

Keywords: Natural gas, Imports, Mexico, Air pollution, Energy policy, fuel oil

DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No3-1

Published in Volume14, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.