SlideShare une entreprise Scribd logo
1  sur  17
Télécharger pour lire hors ligne
Mexico's Energy Reform and the Potential
Impact on Texas' Transportation System
Jolanda Prozzi
November 18, 2014
• Reduced Mexican oil production since
2004
• Increased investment in exploration and
extraction since 1997
• Increased imports of refined products and
crude oil
–Mexico to become a net oil importer
• Government rely on revenues from Pemex
Footer Text
Mexico’s Energy Sector
Mexico’s Energy Sector
Source: Martinez, 2014
• Objectives
– End Petróleos Mexicanos’ (PEMEX) monopoly
– Encourage foreign investment in energy sector
• Hand over regulatory authority of oil and gas
sector:
– Energy Regulatory Commission
– Secretary of Energy
– National Hydrocarbon Commission
• Create new national agency of industrial
safety and environmental protection
Footer Text
Mexico’s Energy Reform
• Reserves available to PEMEX and foreign
private companies?
– PEMEX access to mature fields
– Between 20% and 25% of onshore and offshore
reserves for PEMEX
• PEMEX lacks expertise with shale fields and
deep water drilling
• Private sector will be given more
opportunities with shale fields and deep
water drilling
Mexico’s Energy Reform
Exploration and Production Contracts
• Oil and gas operator must be domiciled in and operate through a
Mexican entity/subsidiary
• Ministry of Energy
– Select areas for bidding and establish technical and financial
qualifications
• Ministry of Finance
– Establish economic and fiscal terms to E&P Contracts
• National Hydrocarbons Commission
– Organize and conduct E&P bid rounds
• Operators will enter into competitive bidding process
• Contract awarded to operator that will maximize Mexico’s revenues
• E&P Round One preliminary blocks already announced
– RFPs in February, 2015
Source: Ramos, 2014
Exploration and Production Contracts
• Exploration Phase (4 to six years)
– Studies to determine existence and location of hydrocarbons
– Work program with geophysical/geological findings and intended drilling
• Evaluation Phase (2 to 4 years)
– Explore and evaluate a discovery (include road and drill site construction,
drilling operations)
– Determine wells are commercial
– Determine viability of extracting hydrocarbons
– Analyze social, environmental, and economic impact
• Production Phase (20+ years)
– Develop oil & gas fields (include transfer lines, transportation systems, and
other oil & gas related transmission operations)
Source: Ramos, 2014
Implementation Issues
• Communal Land (ejidos)
– 51% of Mexico’s surface is
owned/controlled by ejidos
• Security
– Theft from PEMEX > $1 billion per
year
• Uncertainty
– Oil deposits may only be located
across from Eagle Pass
– Less attractive dry and wet gas
closer to Reynosa and Matamoros
Source: Cañas, 2014
Burgos Basin and Texas’ Transportation System
• Transportation supports
three major activities in
energy supply chain:
– Well development
– Resource
production/extraction
– Distribution
Transportation and Well Development
• Five-step well
development process:
– Site preparation
– Rigging up
– Drilling
– Hydraulic fracturing
– Rigging down
Transportation and Well Development
• Initial site preparation
– Heavy bulldozers and dump trucks to build road to serve pad site
• Move rotary rig to pad site and assemble on site
– Require 35 to 45 semi-trucks and 50 to 75 people to assemble rig
– Rigs and equipment will probably be moved from Texas
– Short term increase in OS/OW loads on Texas transportation system and
crossing Texas-Mexico border
– Over long term, companies would invest in equipment
• Drilling of the well hole
– Requires steel pipe and cement - delivered on site by truck for casing and
cementing the well hole
– Mud for lubricating the drill delivered on site by truck
– Mexico’s manufacturing capacity to produce steel oil field pipe and cement
will determine impacts
– Short term increase in pipe and cement from Texas manufacturing facilities
Transportation and Well Development
• Well hole economically viable; well is perforated and
hydraulic fracturing begins:
– Pumping air, water, chemicals, and sand or other “proppants”
under high pressure into well hole
– Frac sand originates from U.S. Midwest, Canada, and Brazil
– In Texas:
• Sand imported through port of Corpus Christi and trucked or railed to Eagle
Ford Shale
• UP developed “Sand 2 Shale” program to expedite sand delivery to Permian
Basin and Eagle Ford
• Oil and gas companies may use existing distribution networks to move sand
into Mexico
– Mexico will potentially meet water demands of hydraulic
fracturing
Transportation and Resource
Production/Extraction
• Disposal of salt water
– Wells produce water (“flow back” water)
– Typically trucked from well site to salt water disposal
wells
– No impact foreseen on
Texas transportation
system
• Disposal wells tend to be local
Transportation and Distribution
• Only six refineries in Mexico and shortage of pipelines
• Extracted oil shipped to refineries in Texas and Louisiana
– From drill sites by truck to gathering hubs and terminals
– From hubs and terminals by rail to refineries
• U.S. rail systems facing challenges:
– Increase in demand of rail car leases
– New regulations on the safety of crude oil transportation
• Another potential concern is the border crossings
– Potential capacity issues
• Pipelines required for natural gas development
Concluding Remarks
• Energy reforms and development of Burgos Basin can
have significant impacts on Texas’ transportation system
– Ports, rail, highways, and border crossings
• Impacts range from sending drilling equipment into
Mexico to shipping oil from Mexico to Texas and
Louisiana
• Could generate substantial freight volumes, consisting of
heavy oil field equipment and other materials (such as
pipe, frac sand, and chemicals) from Texas into Mexico,
as well as crude from Mexico to Texas
References
• Martinez, C. 2014. Energy Reform in Mexico: Mexico’s Opening Energy Markets in
the Context of Major Economic Reforms. Testimony for the September 19, 2014
hearing of the Senate Natural Resources Subcommittee on Studying Impacts of
Mexico's Energy Reforms on Texas. Available online:
http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm
• Ramos, A. 2014. Testimony for the September 19, 2014 hearing of the Senate
Natural Resources Subcommittee on Studying Impacts of Mexico's Energy Reforms
on Texas. Available online:
http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm
• Cañas, J. 2014. Energy Reform in Mexico: Mexico’s Opening Energy Markets in the
Context of Major Economic Reforms. Testimony for the September 19, 2014
hearing of the Senate Natural Resources Subcommittee on Studying Impacts of
Mexico's Energy Reforms on Texas. Available online:
http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm
Jolanda Prozzi
j-prozzi@ttimail.tamu.edu
(512) 584 9143

Contenu connexe

En vedette

En vedette (7)

Moving Toward Meaningful Public Engagement
Moving Toward Meaningful Public EngagementMoving Toward Meaningful Public Engagement
Moving Toward Meaningful Public Engagement
 
Communicatiing Transportation Funding Issues
Communicatiing Transportation Funding IssuesCommunicatiing Transportation Funding Issues
Communicatiing Transportation Funding Issues
 
T Shirts
T ShirtsT Shirts
T Shirts
 
Coworking in Barcelona , facts and figures - Coworking Africa 2015
Coworking in Barcelona , facts and figures - Coworking Africa 2015Coworking in Barcelona , facts and figures - Coworking Africa 2015
Coworking in Barcelona , facts and figures - Coworking Africa 2015
 
Los Colores Primarios
Los Colores PrimariosLos Colores Primarios
Los Colores Primarios
 
Los Colores Secundarios
Los Colores SecundariosLos Colores Secundarios
Los Colores Secundarios
 
Crestwood investor presentation march 2017
Crestwood investor presentation march 2017Crestwood investor presentation march 2017
Crestwood investor presentation march 2017
 

Similaire à Mexico's Energy Reform and the Potential Impact on Texas' Transportation System

Unlocking Mexico’s Oil and Gas Potential
Unlocking Mexico’s Oil and Gas PotentialUnlocking Mexico’s Oil and Gas Potential
Unlocking Mexico’s Oil and Gas PotentialEnergy Intelligence
 
Natural Gas an Inside Propective 2-19-14
Natural Gas an Inside Propective 2-19-14Natural Gas an Inside Propective 2-19-14
Natural Gas an Inside Propective 2-19-14James M. Bright, P.E.
 
PLG Industrial Minerals Proppant Presentation
PLG Industrial Minerals Proppant PresentationPLG Industrial Minerals Proppant Presentation
PLG Industrial Minerals Proppant PresentationPLG Consulting
 
PLG Industrial Minerals Frac Sand Presentation
PLG Industrial Minerals Frac Sand PresentationPLG Industrial Minerals Frac Sand Presentation
PLG Industrial Minerals Frac Sand PresentationPLG Consulting
 
Williams Slide Presentation for Northeast Supply Enhancement Project
Williams Slide Presentation for Northeast Supply Enhancement ProjectWilliams Slide Presentation for Northeast Supply Enhancement Project
Williams Slide Presentation for Northeast Supply Enhancement ProjectMarcellus Drilling News
 
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to Rail
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to RailNorth American Oil & Gas and Petrochemical Supply Chain: Latest Impact to Rail
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to RailPLG Consulting
 
Robinson presents "State of the Proppants Market" presentation
Robinson presents "State of the Proppants Market" presentationRobinson presents "State of the Proppants Market" presentation
Robinson presents "State of the Proppants Market" presentationPLG Consulting
 
PLG Proppants Market March 2014
PLG Proppants Market March 2014PLG Proppants Market March 2014
PLG Proppants Market March 2014PLG Consulting
 
Panama canal expansion
Panama canal expansionPanama canal expansion
Panama canal expansionHeisenberg26
 
Industrial minerals oilfield minerals outlook 2014 final
Industrial minerals oilfield minerals outlook 2014 finalIndustrial minerals oilfield minerals outlook 2014 final
Industrial minerals oilfield minerals outlook 2014 finalPLG Consulting
 
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynotePetroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynoteEnergy Intelligence
 
State of Frac Sand - Energent
State of Frac Sand - EnergentState of Frac Sand - Energent
State of Frac Sand - EnergentTodd Bush
 
Traffic Growth and Transportation Safety in the Bakken Oil Producing Region
Traffic Growth and Transportation Safety in the Bakken Oil Producing RegionTraffic Growth and Transportation Safety in the Bakken Oil Producing Region
Traffic Growth and Transportation Safety in the Bakken Oil Producing RegionUGPTI
 
Public Safety and Transportation Committee
Public Safety and Transportation CommitteePublic Safety and Transportation Committee
Public Safety and Transportation Committeejkiely1
 
Petrichor Energy (TSX.V - PTP) Corporate Presentation
Petrichor Energy (TSX.V - PTP) Corporate PresentationPetrichor Energy (TSX.V - PTP) Corporate Presentation
Petrichor Energy (TSX.V - PTP) Corporate PresentationViral Network Inc
 

Similaire à Mexico's Energy Reform and the Potential Impact on Texas' Transportation System (20)

FoGB assignment
FoGB assignmentFoGB assignment
FoGB assignment
 
Unlocking Mexico’s Oil and Gas Potential
Unlocking Mexico’s Oil and Gas PotentialUnlocking Mexico’s Oil and Gas Potential
Unlocking Mexico’s Oil and Gas Potential
 
Railroad Commission Updates - James Harcourt
Railroad Commission Updates - James HarcourtRailroad Commission Updates - James Harcourt
Railroad Commission Updates - James Harcourt
 
Natural Gas an Inside Propective 2-19-14
Natural Gas an Inside Propective 2-19-14Natural Gas an Inside Propective 2-19-14
Natural Gas an Inside Propective 2-19-14
 
PLG Industrial Minerals Proppant Presentation
PLG Industrial Minerals Proppant PresentationPLG Industrial Minerals Proppant Presentation
PLG Industrial Minerals Proppant Presentation
 
PLG Industrial Minerals Frac Sand Presentation
PLG Industrial Minerals Frac Sand PresentationPLG Industrial Minerals Frac Sand Presentation
PLG Industrial Minerals Frac Sand Presentation
 
Williams Slide Presentation for Northeast Supply Enhancement Project
Williams Slide Presentation for Northeast Supply Enhancement ProjectWilliams Slide Presentation for Northeast Supply Enhancement Project
Williams Slide Presentation for Northeast Supply Enhancement Project
 
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to Rail
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to RailNorth American Oil & Gas and Petrochemical Supply Chain: Latest Impact to Rail
North American Oil & Gas and Petrochemical Supply Chain: Latest Impact to Rail
 
Transportation Challenges Texas
Transportation Challenges TexasTransportation Challenges Texas
Transportation Challenges Texas
 
Robinson presents "State of the Proppants Market" presentation
Robinson presents "State of the Proppants Market" presentationRobinson presents "State of the Proppants Market" presentation
Robinson presents "State of the Proppants Market" presentation
 
PLG Proppants Market March 2014
PLG Proppants Market March 2014PLG Proppants Market March 2014
PLG Proppants Market March 2014
 
Panama canal expansion
Panama canal expansionPanama canal expansion
Panama canal expansion
 
Industrial minerals oilfield minerals outlook 2014 final
Industrial minerals oilfield minerals outlook 2014 finalIndustrial minerals oilfield minerals outlook 2014 final
Industrial minerals oilfield minerals outlook 2014 final
 
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynotePetroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
Petroleum Executive of the Year, Emilio Lozoya Austin presents his keynote
 
State of Frac Sand - Energent
State of Frac Sand - EnergentState of Frac Sand - Energent
State of Frac Sand - Energent
 
Traffic Growth and Transportation Safety in the Bakken Oil Producing Region
Traffic Growth and Transportation Safety in the Bakken Oil Producing RegionTraffic Growth and Transportation Safety in the Bakken Oil Producing Region
Traffic Growth and Transportation Safety in the Bakken Oil Producing Region
 
Regulation of Methane Emissions from Shale Gas Operations by Stephen C. Smith
Regulation of Methane Emissionsfrom Shale Gas Operations by Stephen C. SmithRegulation of Methane Emissionsfrom Shale Gas Operations by Stephen C. Smith
Regulation of Methane Emissions from Shale Gas Operations by Stephen C. Smith
 
KDN RESUME
KDN RESUMEKDN RESUME
KDN RESUME
 
Public Safety and Transportation Committee
Public Safety and Transportation CommitteePublic Safety and Transportation Committee
Public Safety and Transportation Committee
 
Petrichor Energy (TSX.V - PTP) Corporate Presentation
Petrichor Energy (TSX.V - PTP) Corporate PresentationPetrichor Energy (TSX.V - PTP) Corporate Presentation
Petrichor Energy (TSX.V - PTP) Corporate Presentation
 

Plus de Texas A&M Transportation Institute

The Transportation Revenue Estimator and Needs Determination System
The Transportation Revenue Estimator and Needs Determination SystemThe Transportation Revenue Estimator and Needs Determination System
The Transportation Revenue Estimator and Needs Determination SystemTexas A&M Transportation Institute
 
Texas A&M Transportation Institute - 60th Anniversary Brochure
Texas A&M Transportation Institute - 60th Anniversary BrochureTexas A&M Transportation Institute - 60th Anniversary Brochure
Texas A&M Transportation Institute - 60th Anniversary BrochureTexas A&M Transportation Institute
 

Plus de Texas A&M Transportation Institute (20)

When Your Urban Core Arrives
When Your Urban Core Arrives When Your Urban Core Arrives
When Your Urban Core Arrives
 
Methods to Measure & Monitor Pedestrian Travel
Methods to Measure & Monitor Pedestrian TravelMethods to Measure & Monitor Pedestrian Travel
Methods to Measure & Monitor Pedestrian Travel
 
Pedestrian Safety in North Texas
Pedestrian Safety in North Texas Pedestrian Safety in North Texas
Pedestrian Safety in North Texas
 
TTI's Visibility Laboratory
TTI's Visibility LaboratoryTTI's Visibility Laboratory
TTI's Visibility Laboratory
 
Truck Platooning at TTI
Truck Platooning at TTI Truck Platooning at TTI
Truck Platooning at TTI
 
The Transportation Revenue Estimator and Needs Determination System
The Transportation Revenue Estimator and Needs Determination SystemThe Transportation Revenue Estimator and Needs Determination System
The Transportation Revenue Estimator and Needs Determination System
 
Travel Forecasting Program
Travel Forecasting Program Travel Forecasting Program
Travel Forecasting Program
 
Transportation Planning
Transportation Planning Transportation Planning
Transportation Planning
 
Transit Mobility Program at TTI
Transit Mobility Program at TTI Transit Mobility Program at TTI
Transit Mobility Program at TTI
 
Driving Simulator Facilities at TTI
Driving Simulator Facilities at TTI Driving Simulator Facilities at TTI
Driving Simulator Facilities at TTI
 
Sediment and Erosion Control (SEC) Laboratory
Sediment and Erosion Control (SEC) Laboratory Sediment and Erosion Control (SEC) Laboratory
Sediment and Erosion Control (SEC) Laboratory
 
Texas A&M University System - RELLIS Campus
Texas A&M University System - RELLIS CampusTexas A&M University System - RELLIS Campus
Texas A&M University System - RELLIS Campus
 
Multimodal Freight Program
Multimodal Freight Program Multimodal Freight Program
Multimodal Freight Program
 
Public Engagement Planning
Public Engagement PlanningPublic Engagement Planning
Public Engagement Planning
 
I-35 Corridor Project in Texas
I-35 Corridor Project in Texas I-35 Corridor Project in Texas
I-35 Corridor Project in Texas
 
Intelligent Transportation Systems (ITS) Research at TTI
Intelligent Transportation Systems (ITS) Research at TTIIntelligent Transportation Systems (ITS) Research at TTI
Intelligent Transportation Systems (ITS) Research at TTI
 
TTI Facilities for Human Factors Research
TTI Facilities for Human Factors ResearchTTI Facilities for Human Factors Research
TTI Facilities for Human Factors Research
 
Human Factors at TTI
Human Factors at TTIHuman Factors at TTI
Human Factors at TTI
 
Texas A&M Transportation Institute - 60th Anniversary Brochure
Texas A&M Transportation Institute - 60th Anniversary BrochureTexas A&M Transportation Institute - 60th Anniversary Brochure
Texas A&M Transportation Institute - 60th Anniversary Brochure
 
TTI Aviation Research and Planning
TTI Aviation Research and PlanningTTI Aviation Research and Planning
TTI Aviation Research and Planning
 

Dernier

National Women's Month Celebration for PENRO Quezon
National Women's Month Celebration for PENRO QuezonNational Women's Month Celebration for PENRO Quezon
National Women's Month Celebration for PENRO QuezonAryaCapale
 
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...JSchaus & Associates
 
Water can create peace or spark conflict.
Water can create peace or spark conflict.Water can create peace or spark conflict.
Water can create peace or spark conflict.Christina Parmionova
 
2024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 162024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 16JSchaus & Associates
 
2024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 172024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 17JSchaus & Associates
 
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS: relato de expe...
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS:  relato de expe...O Conselho Estadual de Cultura e o Incentivo à Cultura no RS:  relato de expe...
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS: relato de expe...Alvaro Santi
 
Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...ResolutionFoundation
 
Item # 5&6 - 218 Canyon Drive replat prop.
Item # 5&6 - 218 Canyon Drive replat prop.Item # 5&6 - 218 Canyon Drive replat prop.
Item # 5&6 - 218 Canyon Drive replat prop.ahcitycouncil
 
CBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCongressional Budget Office
 
PPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements PowerpointPPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements Powerpointahcitycouncil
 
War in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAWar in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAival6
 
PPT Item # 5-6 218 Canyon Drive replat prop.
PPT Item # 5-6 218 Canyon Drive replat prop.PPT Item # 5-6 218 Canyon Drive replat prop.
PPT Item # 5-6 218 Canyon Drive replat prop.ahcitycouncil
 
Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Christina Parmionova
 
My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54mmazurak
 
For World Water Day 2024, we promote the vital link between water and peace.
For World Water Day 2024, we promote the vital link between water and peace.For World Water Day 2024, we promote the vital link between water and peace.
For World Water Day 2024, we promote the vital link between water and peace.Christina Parmionova
 
Leveraging Water for Peace - World Water Day 2024
Leveraging Water for Peace - World Water Day 2024Leveraging Water for Peace - World Water Day 2024
Leveraging Water for Peace - World Water Day 2024Christina Parmionova
 
india sanitation coalition Swachata Abhiyan ​.pdf
india sanitation coalition Swachata Abhiyan ​.pdfindia sanitation coalition Swachata Abhiyan ​.pdf
india sanitation coalition Swachata Abhiyan ​.pdfcoalitionindiasanita
 
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECDregions
 
World Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportWorld Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportEnergy for One World
 

Dernier (20)

National Women's Month Celebration for PENRO Quezon
National Women's Month Celebration for PENRO QuezonNational Women's Month Celebration for PENRO Quezon
National Women's Month Celebration for PENRO Quezon
 
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...
SPONSORED CONTENT - MyGovWatch - RFP Cliches Debunked: What Government Buyers...
 
Water can create peace or spark conflict.
Water can create peace or spark conflict.Water can create peace or spark conflict.
Water can create peace or spark conflict.
 
How to Save a Place: Become an Advocate.
How to Save a Place: Become an Advocate.How to Save a Place: Become an Advocate.
How to Save a Place: Become an Advocate.
 
2024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 162024: The FAR, Federal Acquisition Regulations - Part 16
2024: The FAR, Federal Acquisition Regulations - Part 16
 
2024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 172024: The FAR, Federal Acquisition Regulations - Part 17
2024: The FAR, Federal Acquisition Regulations - Part 17
 
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS: relato de expe...
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS:  relato de expe...O Conselho Estadual de Cultura e o Incentivo à Cultura no RS:  relato de expe...
O Conselho Estadual de Cultura e o Incentivo à Cultura no RS: relato de expe...
 
Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...Living life to the full: How can we make our longer lives healthier, happier ...
Living life to the full: How can we make our longer lives healthier, happier ...
 
Item # 5&6 - 218 Canyon Drive replat prop.
Item # 5&6 - 218 Canyon Drive replat prop.Item # 5&6 - 218 Canyon Drive replat prop.
Item # 5&6 - 218 Canyon Drive replat prop.
 
CBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New ResearchCBO’s Work on Health Care and a Call for New Research
CBO’s Work on Health Care and a Call for New Research
 
PPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements PowerpointPPT Item # 2 -- Announcements Powerpoint
PPT Item # 2 -- Announcements Powerpoint
 
War in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USAWar in Ukraine and problematics of the Ukrainian refugees in USA
War in Ukraine and problematics of the Ukrainian refugees in USA
 
PPT Item # 5-6 218 Canyon Drive replat prop.
PPT Item # 5-6 218 Canyon Drive replat prop.PPT Item # 5-6 218 Canyon Drive replat prop.
PPT Item # 5-6 218 Canyon Drive replat prop.
 
Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.Yes!? We can end TB - World Tuberculosis Day 2024.
Yes!? We can end TB - World Tuberculosis Day 2024.
 
My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54My Burning Issue: "War in Ukraine" Cycle 54
My Burning Issue: "War in Ukraine" Cycle 54
 
For World Water Day 2024, we promote the vital link between water and peace.
For World Water Day 2024, we promote the vital link between water and peace.For World Water Day 2024, we promote the vital link between water and peace.
For World Water Day 2024, we promote the vital link between water and peace.
 
Leveraging Water for Peace - World Water Day 2024
Leveraging Water for Peace - World Water Day 2024Leveraging Water for Peace - World Water Day 2024
Leveraging Water for Peace - World Water Day 2024
 
india sanitation coalition Swachata Abhiyan ​.pdf
india sanitation coalition Swachata Abhiyan ​.pdfindia sanitation coalition Swachata Abhiyan ​.pdf
india sanitation coalition Swachata Abhiyan ​.pdf
 
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
OECD Webinar - ESG to deliver well-being in resource-rich regions: the role o...
 
World Happiness Report 2024- Full Report
World Happiness Report 2024- Full ReportWorld Happiness Report 2024- Full Report
World Happiness Report 2024- Full Report
 

Mexico's Energy Reform and the Potential Impact on Texas' Transportation System

  • 1. Mexico's Energy Reform and the Potential Impact on Texas' Transportation System Jolanda Prozzi November 18, 2014
  • 2. • Reduced Mexican oil production since 2004 • Increased investment in exploration and extraction since 1997 • Increased imports of refined products and crude oil –Mexico to become a net oil importer • Government rely on revenues from Pemex Footer Text Mexico’s Energy Sector
  • 4. • Objectives – End Petróleos Mexicanos’ (PEMEX) monopoly – Encourage foreign investment in energy sector • Hand over regulatory authority of oil and gas sector: – Energy Regulatory Commission – Secretary of Energy – National Hydrocarbon Commission • Create new national agency of industrial safety and environmental protection Footer Text Mexico’s Energy Reform
  • 5. • Reserves available to PEMEX and foreign private companies? – PEMEX access to mature fields – Between 20% and 25% of onshore and offshore reserves for PEMEX • PEMEX lacks expertise with shale fields and deep water drilling • Private sector will be given more opportunities with shale fields and deep water drilling Mexico’s Energy Reform
  • 6. Exploration and Production Contracts • Oil and gas operator must be domiciled in and operate through a Mexican entity/subsidiary • Ministry of Energy – Select areas for bidding and establish technical and financial qualifications • Ministry of Finance – Establish economic and fiscal terms to E&P Contracts • National Hydrocarbons Commission – Organize and conduct E&P bid rounds • Operators will enter into competitive bidding process • Contract awarded to operator that will maximize Mexico’s revenues • E&P Round One preliminary blocks already announced – RFPs in February, 2015 Source: Ramos, 2014
  • 7. Exploration and Production Contracts • Exploration Phase (4 to six years) – Studies to determine existence and location of hydrocarbons – Work program with geophysical/geological findings and intended drilling • Evaluation Phase (2 to 4 years) – Explore and evaluate a discovery (include road and drill site construction, drilling operations) – Determine wells are commercial – Determine viability of extracting hydrocarbons – Analyze social, environmental, and economic impact • Production Phase (20+ years) – Develop oil & gas fields (include transfer lines, transportation systems, and other oil & gas related transmission operations) Source: Ramos, 2014
  • 8. Implementation Issues • Communal Land (ejidos) – 51% of Mexico’s surface is owned/controlled by ejidos • Security – Theft from PEMEX > $1 billion per year • Uncertainty – Oil deposits may only be located across from Eagle Pass – Less attractive dry and wet gas closer to Reynosa and Matamoros Source: Cañas, 2014
  • 9. Burgos Basin and Texas’ Transportation System • Transportation supports three major activities in energy supply chain: – Well development – Resource production/extraction – Distribution
  • 10. Transportation and Well Development • Five-step well development process: – Site preparation – Rigging up – Drilling – Hydraulic fracturing – Rigging down
  • 11. Transportation and Well Development • Initial site preparation – Heavy bulldozers and dump trucks to build road to serve pad site • Move rotary rig to pad site and assemble on site – Require 35 to 45 semi-trucks and 50 to 75 people to assemble rig – Rigs and equipment will probably be moved from Texas – Short term increase in OS/OW loads on Texas transportation system and crossing Texas-Mexico border – Over long term, companies would invest in equipment • Drilling of the well hole – Requires steel pipe and cement - delivered on site by truck for casing and cementing the well hole – Mud for lubricating the drill delivered on site by truck – Mexico’s manufacturing capacity to produce steel oil field pipe and cement will determine impacts – Short term increase in pipe and cement from Texas manufacturing facilities
  • 12. Transportation and Well Development • Well hole economically viable; well is perforated and hydraulic fracturing begins: – Pumping air, water, chemicals, and sand or other “proppants” under high pressure into well hole – Frac sand originates from U.S. Midwest, Canada, and Brazil – In Texas: • Sand imported through port of Corpus Christi and trucked or railed to Eagle Ford Shale • UP developed “Sand 2 Shale” program to expedite sand delivery to Permian Basin and Eagle Ford • Oil and gas companies may use existing distribution networks to move sand into Mexico – Mexico will potentially meet water demands of hydraulic fracturing
  • 13. Transportation and Resource Production/Extraction • Disposal of salt water – Wells produce water (“flow back” water) – Typically trucked from well site to salt water disposal wells – No impact foreseen on Texas transportation system • Disposal wells tend to be local
  • 14. Transportation and Distribution • Only six refineries in Mexico and shortage of pipelines • Extracted oil shipped to refineries in Texas and Louisiana – From drill sites by truck to gathering hubs and terminals – From hubs and terminals by rail to refineries • U.S. rail systems facing challenges: – Increase in demand of rail car leases – New regulations on the safety of crude oil transportation • Another potential concern is the border crossings – Potential capacity issues • Pipelines required for natural gas development
  • 15. Concluding Remarks • Energy reforms and development of Burgos Basin can have significant impacts on Texas’ transportation system – Ports, rail, highways, and border crossings • Impacts range from sending drilling equipment into Mexico to shipping oil from Mexico to Texas and Louisiana • Could generate substantial freight volumes, consisting of heavy oil field equipment and other materials (such as pipe, frac sand, and chemicals) from Texas into Mexico, as well as crude from Mexico to Texas
  • 16. References • Martinez, C. 2014. Energy Reform in Mexico: Mexico’s Opening Energy Markets in the Context of Major Economic Reforms. Testimony for the September 19, 2014 hearing of the Senate Natural Resources Subcommittee on Studying Impacts of Mexico's Energy Reforms on Texas. Available online: http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm • Ramos, A. 2014. Testimony for the September 19, 2014 hearing of the Senate Natural Resources Subcommittee on Studying Impacts of Mexico's Energy Reforms on Texas. Available online: http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm • Cañas, J. 2014. Energy Reform in Mexico: Mexico’s Opening Energy Markets in the Context of Major Economic Reforms. Testimony for the September 19, 2014 hearing of the Senate Natural Resources Subcommittee on Studying Impacts of Mexico's Energy Reforms on Texas. Available online: http://www.senate.state.tx.us/75r/Senate/commit/c580/handouts14/h091914a.htm