U.S. Imports

Canadian natural gas production has rebounded to the highest level in 10 years. At the same time, Canadian producers are facing tremendous headwinds. On the upside, regional gas demand from the Alberta oil sands is increasing too. But competition for market share in the U.S.  — which currently takes about one-third of Canadian gas production —  is ever-intensifying as U.S. shale gas production is itself at record highs and expected to continue growing. On the whole, net gas flows to the U.S. from Canada thus far have remained relatively steady in recent years, apart from fluctuations due to weather-driven demand. But the breakdown of those flows by U.S. region has shifted dramatically and will continue to evolve as Appalachia takeaway capacity additions allow Marcellus/Utica shale gas production to further expand market share in the Northeast and other U.S. regions. Today, we begin a series looking at what’s happening with gas flows across the U.S.-Canadian border and factors that will influence Canada’s share of the U.S. gas market over the next several years. 

Mexico’s need to import increasing amounts of transportation and cooking fuels--mostly gasoline, diesel, and liquefied petroleum gas (LPG)—from the U.S. is spurring an infrastructure development boom on both sides of the Rio Grande. Over the past few years this has been a frequently reoccurring pattern:   A fast growing market for hydrocarbons emerges, and the need to efficiently move increasing volumes of product from points A and B to points C, D and E quickly becomes urgent. All hands are called on-deck: trucks, railroads, barges, pipelines—plus storage facilities and distribution terminals. Today, we consider the latest initiatives to deliver gasoline, diesel, jet-kero and LPG from Texas to its southern neighbor.

Mexican production of gasoline, diesel and jet fuel continues to fall and Mexico’s imports of these refined petroleum products from the U.S. are rising fast to keep pace with increasing demand. Longer term upgrade projects to increase Mexican refinery transport fuel are finally underway. But before refinery upgrades make a dent in imports, two ambitious refined-products pipeline/terminals projects will make it easier and more efficient to move large volumes of gasoline, diesel and jet fuel from Texas refineries into Mexico.  Today, we update our coverage of fast-moving developments in Mexico-U.S. hydrocarbon trading.

Eager to boost oil and natural gas production, the government of Mexico is in the midst of a multi-year effort to introduce more private-sector involvement and competition. The hope is that a series of reforms will lead to more investment and—over time—a Mexican energy sector that more closely resembles that of Mexico’s amigos North of the Border. Today, we continue our look at the ongoing transformation of U.S.-Mexico hydrocarbon trade and what it may mean for energy companies on both sides of the Rio Grande.