Mexico considers producing more gas through fracking to reduce dependence on the US

US President Donald Trump’s current moves, which are driving rising tensions in international trade, are having repercussions. The Mexican government has begun discussions with the private sector about potentially increasing domestic natural gas production through fracking. Mexico meets most of its demand for natural gas through imports, with almost all of the gas flowing into the country coming from the United States.

In recent days, commodity and financial markets have focused almost entirely on Donald Trump’s actions and the tariffs he recently announced. For some countries, these reach as high as tens of percent, prompting a response, particularly from China. Trump has also threatened significant tariffs against his closest trading partners, Canada and Mexico.

Mexico is a major buyer of US natural gas, which covers most of its domestic consumption—more than 70%. According to Reuters, citing information from the Financial Times, the government is now talking with domestic companies about a possible increase in production. Raising output would take months, but according to Financial Times sources familiar with the discussions, companies are interested in investing in gas production.

RBN Energy recently said, according to Reuters, that gas exports from the southern US to Mexico have tripled over the past decade. At the same time, domestic production has fallen significantly. At the start of the previous decade, it covered roughly two-thirds of demand. RBN Energy says, however, that questions remain over the quality of domestic gas, which often has a high nitrogen content.

Given its geographical location, Mexico does not primarily use gas for heating, but for electricity generation and in industry.