The Economics of Natural Gas in Mexico -- Revisited

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

The Energy Journal, 1993, vol. Volume14, issue Number 3, 17-50

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.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=1120 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:1993v14-03-a02

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().