UTSA economist: No fracking in Mexico could change

PEMEX monopoly could face competition

Northern Mexico could someday benefit like South Texas has from its own Eagle Ford boom.
Northern Mexico could someday benefit like South Texas has from its own Eagle Ford boom.

There is no fracking in Mexico now, but UTSA economist Tom Tunstall said that could change since the Mexican Congress recently passed laws that would mean competition for the state energy monopoly PEMEX.

Tunstall, director of the UTSA Center for Business Research, returned Monday after speaking to business leaders in Monterrey, who are members of the Chamber of Transformation Industry in  Nuevo Leon.

Tunstall said northern Mexico could well be transformed if the country allows U.S. companies to create the kind of boom that has brought South Texas towns back to life.

"I don't think we'll see any overnight transformation, but things could start to happen by late this year if the right framework does get put in place," Tunstall said.

He said specific regulations and reforms are being written now, and are expected to be completed in April.

A map is embedded here.

He said a satellite map of fracking at night shows a "crescent" of wells flaring gas over the Eagle Ford Shale formation.

"Yet the production activity literally stops at the border, at the Rio Grande," Tunstall said.

However, he said the Eagle Ford formation actually stretches down to Monterrey and back over to the Gulf of Mexico.

"Clearly, there's an untapped potential opportunity," he said.

Tunstall said if it becomes a reality, needed infrastructure for trucking would be essential, as it's been in small South Texas communities.

As for corruption and cartel violence, Tunstall said, "While those present challenges, I don't think they're insurmountable by any means."

Tunstall said those issues have not stopped production by U.S. companies in other foreign countries.

He said fracking could re-create the boom in Mexico that has brought billions in revenue and thousands of jobs to South Texas.

If so, he agrees good-paying jobs might go a long way to counter the drug cartels and the need for illegal immigration.

Tunstall said in return, the fracking technology and services pioneered here would be exported to Mexico.

"It's a tremendous opportunity for South Texas and the rest of the country," he said.