Fracked US Gas Will Flow Through Mexico

TRANSCRIPT:

Christina Thompson (Anchor, EarthxNews): Fracked US gas will now flow through Mexico. The fracking boom turned the United States into the world’s largest natural gas producer and exporter. Energy giants like Exxon Mobile based in the US had the supply. Countries around the world, including many in Asia, have the demand. They are using even more natural gas, partly to move away from coal and oil. Mexico is key to America’s continued dominance as the natural gas will flow through terminals in or near the Gulf of Mexico, bypassing the drought stricken Panama Canal.

Recently we spoke with Bar Langan Bruner, research analyst at Global Energy Monitor. Here’s that conversation.

THOMPSON: So when it comes to this global supply of natural gas, where does the US fit in?

BRUNER: In terms of exporting natural gas, the US is in the lead in the world and followed closely by Qatar and and Australia. And the US is also the world’s largest producer of natural gas.

THOMPSON: So then, how did the US rise to become such a key player in fracking and is this a good thing for us?

BRUNER: So, the US wasn’t producing—or wasn’t exporting a ton of gas—and in the the mid-2000s, this fracking boom happened. So US Energy producers realized that they could shoot water into bedrock and and release a lot of gas in a couple different basins in the US. At the same time, some other forces made natural gas prices go up the US started exporting a lot. The question of whether it’s good for us or not, it depends on who you’re asking or you know what you’re asking about. I think it’s been really good for oil majors and and energy companies. It’s also been a good geopolitical tool for the US, so that’s a positive, in some ways, for some people. And there’s also a lot of reasons that increased gas exports is not great. Increasing gas exports in the US exposes gas prices to the international market. So it can raise prices domestically. And that can affect what we pay at home or at the gas pump. And burning them creates greenhouse gas emissions, so it can lead to climate warming.

THOMPSON: In order to export it right now, the Panama Canal is having a whole slew of issues. It’s drought stricken; there’s a lot of backlog with boats trying to get through it. So now, the US has turned to rely on Mexico for that distribution. Can you explain some more of the issues happening with the Panama Canal and how Mexico is now taking on this responsibility?

BRUNER: Sure, yeah, so the US’s natural gas export—to get natural gas out of the US, you have to pipe it out of the basins where it’s produced and then you have to liquefy it to cool it down a lot from gas to liquid state. You load it on the ships, and you ship it out. And the the major places that the US is shipping to are Europe and Asia. So the majority of export terminals in the US are along the Gulf of Mexico—so along the Louisiana and Texas coast. And to get natural gas to Europe, it’s a pretty straightforward ship trip across the Atlantic Ocean from the Gulf Coast, but to get that gas to Asia you have to cross the Panama Canal. And that is a major thoroughfare for ships going from the Atlantic to the Pacific Ocean. And this year specifically it’s an el niño year, which is leading to a pretty large drought in in the region around Panama and the canal. And because of that—and also population change—a lot of the freshwater that’s needed for that canal to operate is not quite there. Mexico is becoming a potential alternative for this route because there are some liquefied natural gas export terminals proposed along the Mexican Baja Coast and that would allow ships to load up on the Baja Coast or on the Pacific Ocean side of things and go straight to Asia without having to go through the canal. So specifically, for Asian gas exports these terminals in Mexico, which are largely either proposed or under construction, they could be an alternative route to getting gas out to to Asia.

THOMPSON: The Biden Administration also recently suspended the approval process for new export terminals. Do you know why that is?

BRUNER: So, what the Biden Administration has suspended is the Department of Energy’s approval process. So for these terminal to function, they need to get approvals from a couple of different agencies. And for terminals in Mexico specifically, they only need approval from the Department of Energy. But the Department of Energy is tasked with the process of deciding whether any export terminal that’s newly built is in “the public interest” and the Biden Administration has effectively asked the DOE to define that better, and use things like greenhouse gas emissions impacts, so climate impacts, and like domestic price impacts and national security and energy security impacts to be considered as part of this approval process. But this is effectively a push from the Biden Administration to ask the DOE to have a more specific process in place to understand whether a terminal really needs to be built and really needs to ship gas out of the US.

THOMPSON: Listen, I know it’s a complicated, tough topic to discuss but I can’t thank you enough for breaking it down for us and our viewers. Thank You!