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The Economics of Natural Gas in Mexico -- Revisited

Michelle Michot Foss, Francisco Garcia Hernandez, and William A. Johnson

Year: 1993
Volume: Volume14
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No3-2
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Abstract:
How long will Mexico continue to be a net importer of natural gas? We explore this question and raise the logical corollary-will import volumes increase? During 1992, gas imports by Mexico peaked at 300 to 350 MMcf/d, primarily to serve incremental demand in Mexico's northern region. We begin our investigation by suggesting that natural gas demand in Mexico is a junction of GDP and the real price of gas, the latter being tied to U. S. prices. Low U. S. gas prices have driven Mexico's import strategies. If downward pressure on U. S. gas prices continues, the import market in Mexico could be preserved through the end of this century. Other factors contribute to the prospects of a long-run import strategy, in particular, capital investment constraints at Pemex; the need to substitute cleaner burning natural gas for the residual fuel oil used widely in Mexico; and a North American free trade zone which may encourage greater gas imports by Mexico. We conclude that it is reasonable for Mexico to remain a net importer of gas for at least the next 10 years.



Global Natural Gas Issues and Challenges: A Commentary

Michelle Michot Foss

Year: 2005
Volume: Volume 26
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol26-No2-6
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Abstract:
Interest in the potential for natural gas to emulate oil as a �global� commodity has grown. While international trade in natural gas in liquefied form has occurred for roughly 40 years, natural gas transactions largely take place in local and regional geographies. Growing demand among large consuming nations relative to global distribution of natural gas resources makes for a compelling story with respect to international, transoceanic trade outlooks. However, natural gas and the natural gas �value chain� are imbued with unique characteristics that require careful consideration by developers, researchers, regulators and policy makers. This article provides an overview and suggests key questions and issues for further research.





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