Coahuila Bets on Fracking to Fill Economic Void Left by AHMSA

With the AHMSA bankruptcy asset auction stalled and tens of thousands of families still waiting for resolution, Governor Manolo Jiménez is positioning unconventional gas extraction in the Sabinas and Burgos basins as the most viable replacement economic engine, and Sheinbaum's scientific committee has given him the opening he needed.

Coahuila Governor Manolo Jiménez has made the case yet for what he is calling "Gas Coahuila,"  an unconventional gas extraction program centered on the state's shale formations, as the most viable path to economic recovery for the central and carboniferous regions devastated by the bankruptcy of Altos Hornos de México (AHMSA). Speaking in Mexico City on the sidelines of the XVI Plenary Session of the Asociación de Ciudades Capitales de México (ACCM), the governor framed the initiative not merely as an energy project but as a regional reconstruction plan.

"Gas Coahuila is a great opportunity to detonate the economy of the regions that were hit by the bankruptcy of AHMSA. Let us say it is one of the most viable solutions," Jiménez said. The governor noted that the state holds shale gas reserves in the Sabinas and Burgos basins, opening the door to development that could help address both Mexico's structural gas dependency and Coahuila's unemployment crisis.

The Void AHMSA Left

The scale of AHMSA's collapse was substantial. Founded in Monclova in 1942, AHMSA was for decades the most important steel producer in Mexico and one of the largest in Latin America. In its peak years, the company had 22,000 direct workers and was the anchor of a supply chain employing approximately 70,000 people across Coahuila and adjacent states, accounting for roughly 8% of the state's GDP. When AHMSA halted steel production in late 2022 and was formally declared bankrupt in 2024, the economic shock hit the Centro and Carbonífera regions of Coahuila disproportionately.

According to Jorge Germán ,Researcher,Universidad de Coahuila, monthly salary flows in Monclova alone dropped by MX$700 million as a result of the closure of the steel and related industries. The city's commercial vacancy rates have surged, with local chambers of commerce reporting dozens of empty storefronts along major avenues. As of April 2026, the asset auction process remains unresolved, the first scheduled auction was declared desert, and former workers continue to wait for both the sale of assets and the payment of wages and severance owed to them.

The Gas Coahuila Case

Against that backdrop, the governor argues that no other sectoral opportunity matches the potential scale of unconventional gas. Jiménez has compared the potential economic magnitude of Gas Coahuila to the impact of AHMSA itself, suggesting the project could be equivalent to "two AHMSAs" in terms of regional economic dynamism, generating direct employment in extraction as well as cascading jobs in services, transport, construction, and local supply chains.

The project is estimated to generate more than 50,000 jobs over a 10-year period, comparable to the employment footprint that the steel industry had in its prime. Jiménez has also pointed out the geographic logic: the gas that Mexico currently imports from the United States is drawn from formations that sit on the same geological basins that extend into Coahuila from across the Texas border. "The 70% of the gas that we use in Mexico we buy from the United States; there they have developed projects worth billions of dollars and created thousands of jobs," the governor stated.

The governor noted that the Gas Coahuila project has been under study for more than 15 years and that exploration work begun in 2015 reached significant technical progress before being abruptly cancelled by the López Obrador administration, a decision Jiménez has characterized as having been made without adequate technical investigation. He said the project today stands at approximately 85% of the preparation needed to initiate operations, pending the regulatory and technical conditions being defined at the federal level.

Federal Alignment and Sheinbaum's Opening

The federal framing has shifted enough to give Jiménez real political traction. President Claudia Sheinbaum presented a scientific committee on April 15 to evaluate whether unconventional gas extraction is technically and environmentally viable, specifically naming Coahuila as the likely pilot zone due to its geological characteristics and lower population density in the relevant areas. The committee, led by UNAM Rector Leonardo Lomelí and including representatives from IPN, UAM, and state universities, has a two-month mandate to deliver its initial findings.

The governor frames the sustainability argument, pointing to the existence of treated water options that would avoid drawing on potable water supplies, and to the fact that the extraction zones are in open, semi-desert terrain far from urban centers or population clusters, conditions he argues make Coahuila a lower-risk candidate than the concerns raised about water-scarce areas in Tamaulipas and Nuevo Leon