Mexico Bans Fracking in Key Shale Basin

Mexico has prohibited hydraulic fracturing within the Tampico-Misantla shale basin, located beneath the states of Veracruz and Tamaulipas, despite the country's efforts to reduce its reliance on U.S. natural gas. President Claudia Sheinbaum stated that fracking would be forbidden in this densely populated area due to its rich indigenous communities and freshwater reserves.

The government ordered a panel to investigate whether unconventional gas could help decrease imports from the United States, which currently make up over 75% of Mexico's natural gas demand. The panel recommended increasing conventional gas production before considering unconventional gas. Even with these measures, Mexico's reliance on U.S. supply would only decrease to approximately 50%, according to Sheinbaum.

The panel suggested that future fracking should be limited to saltwater basins, leaving northern shale formations untouched. Sheinbaum previously opposed fracking and its environmental impacts. Mexico's power sector and industrial operations rely heavily on natural gas, but domestic production has not kept pace with demand. Seven combined-cycle power plants are set to come online, with five more planned, exacerbating the need for gas.

Pemex, Mexico's state-owned oil company, aims to raise domestic production to over 4 billion cubic feet per day by 2030, yet this is still insufficient to eliminate imports. The Tampico-Misantla ban demonstrates the government's efforts to balance domestic gas needs, reduced imports, water risks, and political stability in communities located above the resource.