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Canada to ‘assist’ Mexico with ‘regulations’ on fracking

Prime Minister Stephen Harper and President Enrique Pena Nieto attended a signing ceremony in Mexico City yesterday that CTV reports included “an energy deal that will see Canada assist with regulatory development, technology and environmental monitoring.”

Given the deregulation and weakened environmental monitoring that has occurred in Canada under the Harper government this is not good news for Mexico as its government aims at massive increases in oil and gas production over the next ten years, with an emphasis on fracking and off-shore drilling.

The Wall Street Journal further notes, “Mexico has plans to liberalize its energy sector in order to attract foreign investment. The goal is to boost production and refining capacity. This state visit (by Harper) could help open the doors to Canadian oil and gas firms looking to pounce on opportunities available through Mexico’s proposed energy revamp. ‘Canada offers the technology and know-how in in the energy field, and the Mexicans are interested in partnering with companies with that expertise’, said David Robillard, head of the Canadian Chamber of Commerce in Mexico.”

More specifically, the North-South Institute has stated that, “Investors and Canadian firms with expertise in horizontal drilling, multistage fracking, offshore drilling, as well as service and equipment companies stand to gain the most from these reforms.”

And the Globe and Mail adds, “Ildefonso Guajardo, Mexico’s secretary of economy, said there will be significant opportunities for Canadian energy companies under Mexico’s newly liberalized system.”

Those ‘significant opportunities’ are perhaps underscored by Harper’s scheduled visit to the offices of the TransCanada pipeline company in Mexico City today. This is the company behind the Keystone XL and Energy East pipelines. It also has two natural gas pipelines in Mexico. The 307-kilometre Guadalajara pipeline that connects to an LNG regasification facility near Manzanillo, and the 130-kilometre Tamazunchale pipeline that connects to natural gas power generation plants in east Central Mexico.

This company sees room for it to build more pipelines in Mexico.

In mid-December, the Canadian Press reported, “The CEO of TransCanada Corp. sees opportunities to build new oil pipelines in Mexico, which is poised to end its government’s monopoly on energy development and open its oilfields up to foreign players.” Russ Girling says, “(Mexico will) build pipeline access to their West Coast. The biggest growth market for crude oil in the world is the Asian market. India, China are going to drive the growth.”

Interestingly, the North-South Institute cautions, “Renewed interest in energy from its southern neighbour could shift the US’s focus away from considering the shipping of Canadian heavy crude through the Keystone XL proposed pipeline. These reforms thus have a potential domino effect to inject life back into Canada’s other stalled pipeline projects: Energy East from Alberta to New Brunswick, and the two proposals to carry Alberta’s oil sands through British Columbia for export to Asia.”

At a time when action to stop climate change is urgently needed, it has been estimated that the recently-passed energy law in Mexico could mean as much as 4 million barrels per day of oil produced in Mexico by 2025 (up from the current 2.5 million barrels a day) and natural gas production of 10.4 billion cubic feet by 2025 (up from the current 5.7 billion feet).” This will undoubtedly also mean a vast increase in fracking and related water consumption in Mexico.

Mexico City-based Blue Planet Project organizer Claudia Campero has commented, “The consequences of the ambitious battle to frack our country is likely to be felt in many communities. Most of the public debate is concentrated on whether or not bringing private companies to the game is in the best interest of the country. (But) we (also) need a much fuller public discussion on how are we going to wean ourselves off fossil fuels and deploy truly sustainable energy solutions.”