{"id":60070522,"date":"2025-02-14T17:19:39","date_gmt":"2025-02-14T17:19:39","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60070522"},"modified":"2025-02-20T15:31:12","modified_gmt":"2025-02-20T15:31:12","slug":"mexicos-lng-ambitions-face-the-trump-era-and-environmental-concerns","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/mexicos-lng-ambitions-face-the-trump-era-and-environmental-concerns\/","title":{"rendered":"Mexico\u2019s LNG ambitions face the Trump era and environmental concerns"},"content":{"rendered":"\n<p>Last September, just off the Gulf coast of the Mexican city of Altamira, the country\u2019s <a href=\"https:\/\/www.reuters.com\/business\/energy\/new-fortress-energy-ships-mexicos-first-lng-cargo-export-2024-09-30\/\">first shipment<\/a> of liquefied natural gas (LNG) left a floating facility run by US company New Fortress Energy, bound for Europe.<\/p>\n\n\n\n<p>The new venture is part of a wave of gas investment that has arrived in the country in recent years, targeting markets in Europe and Southeast Asia with US-produced, Mexico-processed natural gas, liquefied by cooling to -162C in a process that compresses its volume to allow for easier shipping.<\/p>\n\n\n\n<p>Since the beginning of the decade, significant increases in global LNG infrastructure have been announced, with <a href=\"https:\/\/globalenergymonitor.org\/es\/report\/lng-2024-latin-america-and-the-caribbean-edition\/\">USD 1.1 trillion<\/a> worth of new terminals under development as of last year. This has been driven by forecasts of growing gas demand in Asia, soaring output from the US, and Europe\u2019s efforts to cut down on its dependency on Russian gas imports following the invasion of Ukraine in 2022 \u2013 a landscape that has led US producers to set their eyes on new ports on the Mexican coast that could shorten shipping routes to overseas markets.<\/p>\n\n\n\n<p>But ambitions of a potential boom in Mexico may be running up against mixed weather in the global gas market, as well as political developments on both sides of the border. This includes the prospect of tensions between returned US president Donald Trump and his Mexican counterpart Claudia Sheinbaum over trade and tariffs, migration and a host of other issues.<\/p>\n\n\n\n<p>Environmental campaigners, meanwhile, have continued to voice concerns over the potential consequences of a build-up in LNG infrastructure that could position Mexico as the world\u2019s <a href=\"https:\/\/www.elfinanciero.com.mx\/empresas\/2023\/08\/08\/mexico-cerca-de-ser-cuarto-lugar-en-exportacion-de-gas-natural-licuado-gnl\/\">fourth-largest exporter<\/a> of the fuel.<\/p>\n\n\n\n<p>\u201cThe industry talks about gas being a transitional fuel and replacing coal in Asia, but that is not the case. It is <a href=\"https:\/\/scijournals.onlinelibrary.wiley.com\/doi\/10.1002\/ese3.1934\">more polluting than coal<\/a>, because of all the steps involved in exporting it,\u201d said Nichole Heil, research and campaigns coordinator for the Private Equity Stakeholder Project (PESP), a non-profit focusing on the impacts of private funds.<\/p>\n\n\n\n<p>\u201cPart of the problem is also the export of emissions,\u201d she added. \u201cThe United States exports them to Mexico, Mexico sends them to Asia, and they are not included in the emissions accounting.\u201d<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-a-cross-border-bet-on-lng\">A cross-border bet on LNG<\/h2>\n\n\n\n<p>The US and Mexico have a long-standing relationship in the gas sector. Mexico imports <a href=\"https:\/\/www.iea.org\/countries\/mexico\/natural-gas\">more than half<\/a> of its gas supply, almost all of it via pipelines from its northern neighbour, with a growing network transporting gas from hubs in Texas, Arizona and New Mexico.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"50050409\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p>The prospect of exporting and processing LNG via this network has seen at least half a dozen projects pitched in Mexico. In addition to the Altamira terminal that made its first shipment in 2024, works to build an export terminal at the <a href=\"https:\/\/www.gem.wiki\/Costa_Azul_LNG_Terminal\">Costa Azul<\/a> hub on the country\u2019s west coast are underway, with <a href=\"https:\/\/www.offshore-energy.biz\/sempra-hits-85-construction-mark-at-natural-gas-liquefaction-project-in-mexico-drawing-closer-to-first-lng\/\">operations<\/a> expected to begin in 2026. Elsewhere on the west coast, the <a href=\"https:\/\/www.gem.wiki\/Vista_Pacifico_LNG_Terminal\">Vista Pac\u00edfico<\/a>, <a href=\"https:\/\/www.gem.wiki\/Saguaro_Energ%C3%ADa_LNG_Terminal\">Saguaro<\/a> and <a href=\"https:\/\/www.gem.wiki\/AMIGO_LNG_Terminal\">Amigo<\/a> terminals have been proposed.<\/p>\n\n\n\n<p>As US investors eye projects, Mexico\u2019s national power company, CFE, has also sought to get in on the action. It proposed the <a href=\"https:\/\/www.gem.wiki\/Salina_Cruz_LNG_Terminal_(CFE)\">Salina Cruz<\/a> export terminal in the southern state of Oaxaca and the <a href=\"https:\/\/www.gem.wiki\/Coatzacoalcos_LNG_Terminal\">Coatzacoalcos<\/a> facility on the Gulf coast of the state of Veracruz.<\/p>\n\n\n\n<div class=\"wp-block-cd-article-image aligncenter block--article-image block--article-image--article\" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><div class=\"block--article-image__column\"><div class=\"hide-expand block--article-image__image\"><img class=\"lazy\" data-src=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/02\/Coatzacoalcos-fishing_Alamy_PA5AY8-2.jpg\" data-srcset=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/02\/Coatzacoalcos-fishing_Alamy_PA5AY8-2-768x514.jpg 768w, https:\/\/dialogue.earth\/content\/uploads\/2025\/02\/Coatzacoalcos-fishing_Alamy_PA5AY8-2-1024x686.jpg 1024w, https:\/\/dialogue.earth\/content\/uploads\/2025\/02\/Coatzacoalcos-fishing_Alamy_PA5AY8-2.jpg 2560w\" data-sizes=\"(max-width: 600px) 768px, (max-width: 1024px) 1024px, 2560px\" alt=\"man holding fishing rod\"\/><\/div><div class=\"block--article-image__content\"><div itemprop=\"caption\" class=\"block--article-image__caption\">A man fishes off the coast of Coatzacoalcos in Veracruz state, Mexico, where an LNG export terminal is planned. While Mexican and US developers have been eager to push projects, analysts are uncertain about the impacts Trump\u2019s return will have on such ambitions, fearing that LNG might get caught in the trade war that he recently unleashed (Image: Documentalium \/ Alamy)<\/div><\/div><\/div><meta itemprop=\"contentUrl\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2025\/02\/Coatzacoalcos-fishing_Alamy_PA5AY8-2.jpg\"\/><meta itemprop=\"contentSize\" content=\"2 MB\"\/><meta itemprop=\"height\" content=\"1714\"\/><meta itemprop=\"width\" content=\"2560\"\/><meta itemprop=\"author\"\/><meta itemprop=\"representativeOfPage\" content=\"true\"\/><\/div>\n\n\n\n<p>These proposals have seen Mexican and US developers such as CFE, Mexico Pacific and Sempra Infrastructure strike deals with financers and potential LNG buyers including banks and multinational energy firms from Australia, China, France, Japan, Malaysia, Singapore and South Korea.<\/p>\n\n\n\n<p>However, proposed LNG projects in Mexico have also been contingent on acquiring permits for the re-export of US gas issued by the Department of Energy, which allow for shipments to countries with which the US does not have free trade agreements \u2013 a roster that includes the European Union and nearly all Asian nations.<\/p>\n\n\n\n<p>The issuing of LNG export permits had <a href=\"https:\/\/www.theguardian.com\/us-news\/2024\/jan\/26\/biden-delays-cp2-louisiana-lng-export-project\">been paused<\/a> since January 2024 as former US president Joe Biden\u2019s administration called for <a href=\"https:\/\/www.reuters.com\/business\/energy\/biden-administration-releases-lng-export-study-urging-caution-new-permits-2024-12-17\/\">a review<\/a> into their climate impacts.<\/p>\n\n\n\n<p>The measure generated uncertainty over projects, <a href=\"https:\/\/www.eenews.net\/articles\/3-questions-answered-about-bidens-lng-pause\/\">court battles<\/a>, and anger in the industry, but was <a href=\"https:\/\/www.energy.gov\/articles\/us-department-energy-reverses-biden-lng-pause-restores-trump-energy-dominance-agenda\">revoked<\/a> on 20 January, day one of Donald Trump\u2019s return to the White House \u2013 true to pledges he made during his election campaign.<\/p>\n\n\n\n<p>The lifting of the Biden-era order has been <a href=\"https:\/\/www.offshore-energy.biz\/trump-makes-good-on-all-his-energy-promises-golden-us-oil-gas-lng-age-and-offshore-wind-pause-in-effect\/\">welcomed<\/a> by the sector, but analysts remain <a href=\"https:\/\/www.bnamericas.com\/en\/interviews\/mexicos-lng-export-dream-turns-sour-as-political-risk-rises-investor-appetite-fades\">uncertain<\/a> about the wider impacts Trump\u2019s return will have on ambitions for Mexican LNG exports, even with his firm backing for fossil fuels \u2013 notoriously promising to \u201cdrill, baby, drill\u201d. Commentators have <a href=\"https:\/\/www.argusmedia.com\/en\/news-and-insights\/latest-market-news\/2642505-trump-s-lng-plans-could-shape-mexico-s-gas-ambitions\">highlighted political risks<\/a> from potential US policies, both domestic and those targeted at Mexico, that could raise tensions between the two countries.<\/p>\n\n\n\n<p>LNG shipments may yet get caught up in the trade war unleashed by President Trump, which has so far included <a href=\"https:\/\/www.whitehouse.gov\/presidential-actions\/2025\/02\/imposing-duties-to-address-the-synthetic-opioid-supply-chain-in-the-peoples-republic-of-china\/\">imposing<\/a> an additional 10% tariff on Chinese goods starting 4 February. Mexico, meanwhile, negotiated an extra month to avoid an announced 25% US tariff on the country\u2019s goods, after President Sheinbaum agreed on 1 February to US demands to increase security at its northern border.<\/p>\n\n\n\n<p>For Heil, the PESP researcher, Trump\u2019s push for more LNG has serious consequences. \u201cOutside of questionable economic gains for Americans, the uncertain demand for LNG, suppressed private equity returns, and financial liabilities associated with LNG impacts on local communities and the environment create a shaky foundation for the LNG industry and its potential future,\u201d she says.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-environmental-concerns\">Environmental concerns<\/h2>\n\n\n\n<p>The role of natural gas and its liquefied form in global energy systems is a source of fierce debate, including its <a href=\"https:\/\/dialogue.earth\/en\/energy\/50409-natural-gas-latin-america-energy-transition\/\">contested labelling<\/a> as a \u201cbridge\u201d or \u201ctransition fuel\u201d in the switch to renewables-based systems.<\/p>\n\n\n\n<p>On the expansion of Mexican LNG infrastructure, environmentalists have expressed fears over the potential impacts along these new supply chains. These include methane leaks during liquefaction, transportation and regasification processes, among other problems, that would contribute negatively to emissions.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"115955\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p>The proposed Saguaro project, in particular, has attracted strong opposition from <a href=\"https:\/\/pestakeholder.org\/news\/pe-backed-lng-project-marred-with-setbacks-and-community-opposition\/\">a coalition<\/a> of more than 30 community and environmental organisations, as well as the US-based NGO, the Natural Resources Defense Council (NRDC), which has <a href=\"https:\/\/www.nrdc.org\/bio\/joel-reynolds\/mexico-pacifics-saguaro-lng-wrong-project-wrong-place\">described<\/a> it as the \u201cwrong project, wrong place\u201d.<\/p>\n\n\n\n<p>Mima Holt, the NRDC\u2019s global coordinator for international climate, said that processes to evaluate new projects must consider potential economic and environmental impacts. \u201cThat includes climate impacts and the unique characteristics and needs of special places like the Gulf of California,\u201d she noted. \u201cThe \u2018Aquarium of the World\u2019 is not a sacrifice zone for the whims of the American oil industry.\u201d<\/p>\n\n\n\n<p>Pablo Ram\u00edrez, director of the climate change campaign at Greenpeace Mexico, questioned the development of LNG projects in the country. <\/p>\n\n\n\n<p>\u201cThey do not take into account environmental and social liabilities, and those costs are not reflected in the terminals,\u201d he told Dialogue Earth. \u201cWhat we have seen is that the plan for these projects between private companies and the Mexican government is a new form of <em>maquila<\/em>,\u201d he added, referring to Mexican factories that assemble and manufacture for export. \u201cWe manufacture gas that is not ours, generating wealth that does not stay here and assuming liabilities. CFE is looking for a rate that will pay off exports and the gas pipelines it manages.\u201d<\/p>\n\n\n\n<div class=\"wp-block-cd-pull-quote block--pull-quote\"><div class=\"block--pull-quote__wrapper\"><blockquote class=\"block--pull-quote__quote\">The Gulf of California, the \u2018Aquarium of the World\u2019, is not a sacrifice zone for the whims of the American oil industry<\/blockquote><cite class=\"block--pull-quote__cite\">Mima Holt, Natural Resources Defense Council\u2019s global coordinator for international climate<\/cite><\/div><\/div>\n\n\n\n<p>Meanwhile, the relocation of US gas export operations has been pitched by supporters as a method of cutting certain emissions in its supply chains, namely those from shipping.<\/p>\n\n\n\n<p>In its 2022 <a href=\"https:\/\/www.energy.gov\/sites\/default\/files\/2022-10\/ea-2192-vista-pacifico-lng-2022-10.pdf\">environmental assessment<\/a> of the Vista Pac\u00edfico project, the US Department of Energy estimated that life-cycle emissions of LNG shipped from New Orleans to Shanghai \u2013 a route that requires going through the Panama or Suez canals, or long voyages around southern continental capes \u2013 would total 688 kilograms of CO2 equivalent per megawatt-hour of power generated using the fuel. Of this, 76 kilograms \u2013 or 11% \u2013 would come from tanker transport.<\/p>\n\n\n\n<p>In comparison, transporting LNG directly across the Pacific, between Shanghai and Topolobampo in western Mexico, where the Vista Pac\u00edfico facility is being proposed, would reduce overall emissions by between 3% and 7% due to the shortened route, the assessment noted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-boom-or-bubble\">Boom or bubble?<\/h2>\n\n\n\n<p>Beyond the potential environmental impacts of a global LNG infrastructure build-out, some analysts have also cast doubt on the long-term economics of export projects, amid a mixed outlook for demand.<\/p>\n\n\n\n<p>Rather than a boom, organisations such as the Institute for Energy Economics and Financial Analysis (IEEFA) have <a href=\"https:\/\/ieefa.org\/resources\/global-lng-outlook-2024-2028\">warned<\/a> of a bubble as LNG potentially reaches oversupply by 2026.<\/p>\n\n\n\n<p>A few years on from Europe\u2019s rush to find new suppliers after Russia\u2019s invasion of Ukraine, the continent\u2019s LNG demand is <a href=\"https:\/\/www.e3g.org\/news\/declining-eu-gas-demand-diminishes-need-for-us-liquified-natural-gas\/\">now in decline<\/a> as its countries pursue ambitious clean energy&nbsp;targets by the end of the decade.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"50056150\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p>Meanwhile, in Asia \u2013 the region <a href=\"https:\/\/think.ing.com\/articles\/article-3-lng-demand-growth-hinges-on-asia-hold\/\">forecast<\/a> to account for the majority of future LNG demand growth \u2013 varying challenges around project delivery and fiscal issues may dampen demand, the IEEFA says. It also suggests that Chinese policies favouring domestic industries will likely constrain the country\u2019s import demand.<\/p>\n\n\n\n<p>PESP\u2019s Nichole Heil raised the prospect of such investments becoming faltering assets. \u201cAs the global momentum shifts towards reducing carbon emissions and adopting renewable energy, investments in gas pipelines and LNG facilities with long payback periods may not deliver the expected returns. This poses risks for institutional investors, especially pension funds, which rely on consistent returns,\u201d she told Dialogue Earth.<\/p>\n\n\n\n<p>Rachel Eunbi Shin, an energy supply chain researcher at the South Korean NGO <a href=\"https:\/\/forourclimate.org\/\">For Our Climate<\/a>, said that the industry has encouraged oversupply to stimulate artificial demand. \u201cDemand is falling; most players are buying LNG and planning to resell it, creating an artificial market. But the infrastructure is increasing,\u201d she told Dialogue Earth from Seoul.<\/p>\n\n\n\n<p>As for Mexico\u2019s projects, President Sheinbaum has not expressed a government stance on the wave of LNG projects, but <a href=\"https:\/\/www.latimes.com\/espanol\/mexico\/articulo\/2024-10-16\/el-gobierno-mexicano-anuncia-inversiones-privadas-por-20-000-millones-de-dolares-para-2025\">praised<\/a> Mexico Pacific\u2019s investment last October when she met the corporation\u2019s CEO Sarah Bairstow.<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recent projects to export US natural gas worldwide via Mexican LNG terminals face uncertainty amid potential trade tensions and community pushbacks<\/p>\n","protected":false},"author":3478,"featured_media":60070541,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[757],"tags":[50029993,50041542],"hashtags":[],"country":[50002597],"class_list":["post-60070522","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-elections","tag-natural-gas","country-mexico"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v26.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mexico\u2019s LNG ambitions face the Trump era and environmental concerns<\/title>\n<meta name=\"description\" content=\"Recent projects to export US natural gas to Asia and Europe via Mexican LNG terminals face uncertainty amid potential trade tensions and community pushbacks\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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