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Canadian capital to finance more water destruction in Mexico

In December, the Mexican government passed an ‘energy reform law’ that means corporations can now explore and extract the vast oil and gas reserves in Mexico. Bloomberg described this as “the nation’s most significant economic reform since the North American Free Trade Agreement”.

The expected inflow of foreign capital means that oil production could increase from 2.5 million barrels a day now to as much as 4 million bpd by 2025. Natural gas production is expected to increase from 5.7 billion cubic feet now to 10.4 billion cubic feet in 2025. Without question this will involve fracking and the use of millions of litres of water.

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. …[Instead of this], we need a much fuller public discussion on how are we going to wean ourselves off fossil fuels and deploy truly sustainable energy solutions.”

Today, the Globe and Mail reports, “Mexico’s state-owned development bank [Banco Nacional de Comercio Exterior SNC] is forging alliances with Canadian financial institutions to boost the stunted levels of commercial lending in the country, especially in the newly reformed energy sector where increased investment is sorely required.”

Named in the article are the Bank of Nova Scotia, Bank of Montreal, Canadian pension funds and Export Development Canada.

Troy Wright, the chief executive of Scotiabank’s Mexican subsidiary, says, “All of the reforms are extremely exciting and we’re optimistic they will bring substantial changes in Mexico.” The article notes, “He said the reforms should unleash levels of investment in the country’s energy sector that Canada is used to seeing in the Alberta oil sands, and that Scotiabank will target project financing as well as lending to small and medium enterprises that will supply the industry.”

Mexico’s Energy Regulatory Commission says fracking takes 7.5 million to 30 million litres of water per well to release the gas. A field of 10 wells would need between 25 million and 40 million litres of water. The northern states of Nuevo León and Coahuila may be especially hard hit by this water extraction for fracking.