Image credits: PEMEX
News Article

Is Fracking Getting The Green Light In Mexico?

By Pedro Alcalá | Tue, 09/21/2021 - 18:12

PEMEX has announced that they will invest almost US$788 million into upstream projects that require hydraulic fracturing, or fracking, during 2022. This figure represents an increase of 200 percent over the budget allocated for these types of projects this year, which hovered above US$262 million. 

Fracking has been both a widespread and controversial extraction technique in other parts of the world, most notoriously in the US. While fracking has played an essential role in the shale oil and gas revolution of US states like Texas and North Dakota, it has been preemptively banned in other states like New York and Pennsylvania (those bans have not always stood up to political challenges, given the profitability of shale oil and gas production through fracking). The central criticism against fracking (but far from the only one) is that it is a dangerous experimental practice which inevitably poisons groundwater reservoirs and makes surrounding communities unlivable as a result; the extent of these claims continues to be discussed to this day.

Fracking has been performed in Mexico for the past decades in the context of research and well testing, without being adopted in any significant widespread manner. The controversy that surrounds fracking has led to the formation of organizations such as the Mexican Alliance Against Fracking, which has called for a prohibition on fracking to be codified into Mexican law. These efforts failed at the time of the Energy Reform’s passing, which includes no language officially limiting or banning the practice of fracking. President López Obrador has made  promises that he will not support a large-scale investment on fracking, both during his campaign and throughout his administration. However, this announcement from PEMEX would indicate a reversal of that promise.

In an interview with El Heraldo de Mexico, PEMEX and Congress advisor Fluvio Ruiz Alarcón said that the NOC is coming to terms with the fact that increasing its production levels is its number one priority. “Realism is imposing itself on the ideological concerns of this administration.” According to Alarcón, its increasing investment in fracking could be seen as PEMEX’s effort to keep all of its options open in relation to the growth and reliability of its production portfolio. This is also true for the 192 percent announced increase in PEMEX’s deepwater investments for 2022, another upstream category that the president had previously criticized and vowed to disinvest public funds from.

The data used in this article was sourced from:  
MBN, El Heraldo de Mexico
Photo by:   PEMEX
Pedro Alcalá Pedro Alcalá Senior Journalist & Industry Analyst