Home' Trinidad and Tobago Guardian : May 8th 2014 Contents BG20 REGIONAL
BUSINESS GUARDIAN www.guardian.co.tt MAY 2014 • WEEK TWO
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The EMA is responsible for, among other things develop-
ing and implementing policies, laws and programmes for
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/ firms regarding 'Development of an Ambient Air Quality
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send to the EMA's Head Office under the caption:
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the Terms of Reference (TOR), kindly visit the EMA's Head
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The deadline date for submission of proposals is
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Avelardo Gárza Garcia s face
splits into a grin as he remembers
the moment, a few months ago,
when the exploratory well behind
his house produced a roaring flame,
indicating that his family s cattle
ranch sat on a reserve of shale gas.
"I heard a loud puff," he says,
"and the flame shot 15 feet into
He telephoned his 14 brothers
and sisters to tell them the good
"I thought mucho dinero, " he
says, patting his pockets.
If he lived only a few hours
north, in Texas, he indeed might
be sitting on a jackpot. Things are
never so easy in Mexico, though.
In the weeks afterward the area
around his home suffered an
unusual spate of earthquakes. In
nearby villages locals point to
cracks in their walls and say that
they never have felt anything like
Sergio Gómez, mayor of the
municipality of Los Ramones, says
that the tremors have shaken peo-
ple s confidence in hydraulic frac-
turing or "fracking," even if there
is no scientific proof that the two
Only two shale wells have been
dug in Los Ramones, and fewer
than 25 in all of Mexico, compared
with thousands in nearby south
Texas, which has sustained barely
any quake damage despite the "shale
revolution." Already the jokes fly,
"Visitors used to stay away from here
because of the narcos," one woman
says. "Now it s because of the
An influx of oilmen is exactly what
the government wants, not a debate
about the merits of fracking. On April
30 it sent bills to Congress fleshing out
a December constitutional overhaul
which, for the first time in 75 years,
lets private companies drill for hydro-
carbons in Mexico.
The reforms aim both to spur deep-
water oil drilling in the Gulf of Mexico,
where Mexico badly lags the United
States, and to boost the country s nas-
cent shale industry.
The government of Nuevo León, in
which Los Ramones is located, says
that a shale boom could turn Monterrey,
its industrial capital, into a North Amer-
ican energy hub. Pemex, the state oil
company, reckons that Mexico may
contain more shale oil and gas than the
55 billion barrels of conventional hydro-
carbons it has pumped in its history,
some of it in an extension of the Eagle
Ford formation that has made South
The energy reforms are welcome,
although a big legislative backlog in
Congress means that it is not clear
when the secondary laws will be
approved. Mexico is far from becoming
the next Texas, however. Land rights
are different: Even after the reforms
the Mexican state will own the hydro-
carbon rights, whereas in America they
are privately held. For energy firms the
Mexican system will be as attractive as
the American one only if taxes and roy-
alties are low, shale experts say. That
The mix of shale oil and gas on either
side of the border also may be different.
Given America s low natural-gas prices,
at present it is worthwhile to produce
gas only if it comes with shale oil.
Northern Mexico is believed to have
mostly "dry" gas alone.
Mexico also lacks infrastructure. It
has few pipelines to take gas from the
wellhead, not to mention a lack of paved
roads or water supplies for fracking. In
the border region that contains much
of the shale, though not in Los
Ramones, drug-related violence is so
rampant that the army escorts fracking
crews to and from drilling sites.
The only similarity between south
Texas and Mexico, one seasoned shale
man says, is the rock formation.
@2014 The Economist Newspaper
Ltd. Distributed by the New York
Shale gas in Mexico: On shaky ground
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