Texas Energy Goes South
While Texas energy companies continue to see a boom in oil and natural gas exploration thanks to new technologies and discoveries such as the Eagle Ford Shale, a similar boom is happening south of the border. Mexico is looking to expand its national system of oil and natural gas pipelines, thanks to increasing energy demand. And because the country is still years away from further developing many of its own rich energy resources, it's looking to the U.S. for product. "We just found a new customer for our new bounty of natural gas," says oil industry analyst Phil Flynn with excitement. He tells KTRH that the increased supply of natural gas from Texas has led to lower prices that are attractive to an energy-hungry neighbor like Mexico.
Indeed, companies like Houston-based Kinder Morgan are already looking at expanding current pipelines from Texas into Mexico. Flynn says this boon in cheap, abundant natural gas is a direct result of major drilling innovations. "New technologies such as fracturing and directional drilling really have been the most exciting discovery in energy probably in the last 25 to 50 years," he says. The increased energy flow to Mexico will also help that country's manufacturing industry, which makes it a good deal on both sides of the border, according to Flynn. "When you've got a country like Mexico that's sitting on some huge oil and natural gas reserves, coming to the United States to take advantage of our technology and low prices, this is a win-win-win."
Mexico's incoming President, Enrique Pena Nieto, wants to develop more of their oil and gas reserves, but that process could take many years. In the meantime, Mexico needs more resources now, and those just happen to be in the U.S. Flynn says the current expansion not only means more profits for Texas companies now, but could also yield dividends in the future. "Hopefully it will open up the door down the road in Mexico, so U.S. oil companies can go in and start using their resources as well," he says. For now, this is one international partnership that appears to be good for everyone involved.