The 4T CFE wants to use twice as much Texas gas


Today the calculation for December 2021 of the Energy Information Administration on Mexican imports of US gas is released. But it is not necessary to wait to know that 2021 was a record year for this indicator: until November, the average was 6,000 million cubic feet per day (bcf/d). At some times of the year, more than three out of every four of the gas molecules that were burned in Mexican territory were imported.

For those who worry about foreign dependency, these are already alarming data. They are likely to get worse. Already, the demand for gas is expected to grow at 5 percent per year. And Pemex still does not have a credible plan to increase its production. This portends more dependency and import. But, for some reason, the same Q4 CFE that boasts of its nationalism is doing what it can to increase its demand for gas – and, therefore, its own dependence on imported fuels.

Your own data is very clear. If the reform promoted by the government (and the CFE) is approved, the CFE forecasts that its own electricity generation based on natural gas will increase by 114 percent in just three years. Using conservative assumptions, this would involve adding 1.2 bcf/d to its own gas demand. All else equal, the reform would have increased already outrageous gas imports (worth many billions of dollars per year) by 20 percent.

This is not very strategic. The CFE already relies on gas (in combined-cycle and turbo-gas plants) for almost four out of every 10 megawatt-hours of electricity it generates with its own plants (excluding independent power producers, according to its own preferred definition). What’s the point of putting more eggs in this basket, to get to almost six out of 10? Energy security, which depends on the diversification of the generation matrix, is not strengthened in this way – why haven’t you seen the news from Russia? The energy transition, which depends on using less and less fossil fuels, less.

There is another way to see it. Under the proposed reform, the CFE intends to take over 49% of the country’s total generation from natural gas. Today it has 24 percent. Isn’t it contradictory that your powerful state company intends to double its participation in electricity generation from a technology that overwhelmingly depends on an imported product? This Administration, for the record, has been in charge of preaching that everything that is not self-sufficiency is a lack of sovereignty and weakness. But even without touching ideological points, what will a rise in the price of gas do to the finances of the CFE?

Not even displacing half of the private generation of self-supply and combined cycle, as the government intends to do, will they be able to counteract the dramatic increase in demand for gas. If the electricity reform of this government is approved, in 2024, 64% of the electricity generated in the country will depend on an overwhelmingly imported product. This is more than today. 21.7% will be clean, produced with resources such as water, air and wind that are so sovereign and nationalistic that they are not imported, nor can they be imported. This is considerably less than today. Tremendous sovereignty.

@pzarater

Pablo Zarate

Consultant

Beyond Cantarell



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