Mexico Looks to EVs to Drive Gas
Senior government officials in Mexico want to see domestic gas production ramped up to feed Mexico’s fast-growing gas-generated power sector, which they say will be largely driven by electric vehicle (EV) sales.
While it appears it will take many years for EVs to grab significant market share in Mexico, which is one of the world’s fastest-growing passenger vehicle markets, officials are worried about the country’s ability to charge those vehicles.
Juan Carlos Zepeda, commissioner of Mexico’s National Hydrocarbon Commission (CNH), disputes forecasts by Mexico’s energy secretariat, Sener, that gas demand in the country will only grow at an annual rate of about 3.5%, since it doesn’t take into account power demand growth generated by EV and plug-in hybrid vehicle (PHV) sales.
“We are (in for) a few years of radical changes,” he told an Oil Gas Innovation Forum in Mexico City last summer. “The future of passenger transportation will be electric. In five years all of us will use electric vehicles.”
EV sale statistics, however, don’t appear to support that contention. Passenger vehicle sales in 2017 totaled some 1.53mn units, according to data from the Mexican Association of the Automotive Industry (AMIA), a 4.6% decline from 2016. EV and PHV sales through November 2017 totaled just 9,177 units.
Still, Zepeda insists Mexico must increase its domestic gas production to prepare for a shift to EVs, as well as to the use of compressed gas as a transportation fuel.
State-owned Pemex, which still dominates fossil fuel production in the country, has focused much of its attention in recent years on oil production. As a result, its gas production in 2017 declined to about 4.4bn ft3/day from 6.5bn ft3/day in 2009, and half of the country’s 8bn ft3/day of natural gas consumption is fed by imports from the US.
CNH has forecast that domestic gas production could fall to as low as 2.69bn ft3/day if the trend is not reversed, and it’s looking to the private sector – which currently produces only about 35mn ft3/day – to help with that reversal. To that end, it recently auctioned 19 blocks, many of them prospective for natural gas, in the Gulf of Mexico, and in July will offer 37 onshore blocks, many in the highly gas-prospective Burgos Basin.