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Where Is Fracked Gas Really Headed as It Passes Through Texas' Trans-Pecos Pipeline?

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The consortium building the Trans Pecos pipeline (TPP) says that within months, fracked gas will be making the 148 mile journey from Texas’ Permian Basin to Mexico, where it will meet that country’s natural gas needs. As part of an agreement with Mexico’s federal electricity commission, TPP and the Comanche Trail pipeline together will send a total of 2.5 billion cubic feet of natural gas to Mexico every day.

TPP’s parent company, ETP Consortium, which is comprised of Energy Transfer Partners (ETP), Carso Energy, and MasTec, has also promised benefits to Texas communities in the pipeline’s path, though, as DeSmog has reported previously, few of those benefits have been realized.

Now that the Trans-Pecos pipeline is more than 90 percent constructed, some associated with it are admitting that, unlike their promotional materials say, the ultimate goal of much of the fracked gas is not Mexico but Asia.

All Pipelines (Mis)Lead to Mexico?

Texans opposed to TPP admit that misleading them about the destination of the fracked gas wouldn’t be the worst of ETP’s sins — they say they won’t benefit no matter where it’s headed — but it shows the company can’t be trusted.

Lori Glover, leader of the Big Bend Defense Coalition, told DeSmog about her concerns that ETP started out by telling Texans this “myth” that Mexico needs the gas.

The company expected us to swallow several myths [about TPP] including the destination for the fracked gas,” Glover told DeSmog. “Which makes it even more important for the government to do its job, to consider the environmental impact and the rights of Indigenous people and to actually regulate, which it hasn’t done.”

Luc Novovitch, who was commissioner of Brewster County, Texas, until December, told DeSmog that it’s maddening and surprising that ETP would mislead residents about the use of fracked gas when it didn’t have to.

ETP didn’t even have to negotiate with us,” Novovitch said. “They came, they took the land, and built the pipeline even though there is no benefit or use for the public.”

Mexico’s Big Plans for Natural Gas

Mexico has pledged to cap and cut carbon emissions by expanding natural gas infrastructure and converting oil-burning power plants to natural gas. In 2015, Mexico’s energy ministry announced a five-year plan that would accommodate much higher levels of natural gas imports from the United States.

But it’s not clear that Mexico’s natural gas needs warrant all of the border-crossing pipelines being built to serve it.

The U.S. Energy Information Administration (EIA) says that, while Mexico is expanding its pipeline capacity to import low-priced natural gas from the United States, it is “expected to begin producing shale gas commercially after 2030, with shale volumes contributing more than 75% of total natural gas production by 2040.”

According to the EIA‘s 2013 assessment of world shale gas resources, Mexico already had an estimated 545 trillion cubic feet of technically recoverable shale gas resources — the sixth largest of any country examined in the study — and that was four years ago.

Where Is the Trans-Pecos Pipeline’s Gas Really Headed?

Despite promises to Texans by ETP and Carso Group Chairman and CEO Carlos Slim that all of the fracked gas is intended for Mexico, those connected with TPP now admit that the end goal for much of the exported gas is a new liquefied natural gas (LNG) facility on Mexico’s Pacific coast.

At an investor conference in London on October 29, 2014, Pemex, Mexico’s state-owned oil company, pitched investors on its intent to export LNG to Asia as part of a Transoceanic Corridor Project.

Presentation showing Pemex's plans to ship oil from Mexico to Asia

And James Beauchamp, president of the Midland-Odessa Transportation Alliance (MOTRAN) mentioned the true destination of fracked gas flowing through TPP deep in a recent article in a West Texas newspaper:

The main endgame is to export natural gas out of the port at Topolobampo. We’re not sending it to Europe … they’re shipping it to Asia and Pacific countries, which have an even higher cost of natural gas.”

Coyne Gibson, a former petrochemical engineer and one of the leading opponents of TPP and other pipelines in West Texas, said there’s plenty of evidence Mexico is merely a “pass-through” to allow the unregulated export of LNG to hungry markets overseas.

As we’ve seen, in the recent quote from James Beauchamp it’s an open secret that portions of U.S. gas moving to Mexico will be converted to LNG for export,” Gibson told DeSmog.

Gibson says that most Texans will accept the words of ETP, or any oil and gas company, because they are too dependent on the industry and its promises of jobs and growth.

The message of oil and gas goes like this,” Gibson said. “‘We’re going to extract at the most rapid pace possible, fossil fuels; we’ll pay you until either the market collapses or the resource runs out; we’ll contaminate your air, water, and soil; and none of the extracted resource is going to benefit you, because we’re selling it to other countries.’”

Industry watchers say the main buyer of the LNG will be Japan, which aims to replace the loss of energy from the shuttered Fukushima nuclear plant with natural gas. Industry reports show that primary financial backers of TPP include the Bank of Tokyo-Mitsubishi and the Sumitomo Mitsui Banking Corporation in Japan.

In an email response to DeSmog, TPP spokesperson Vicki Granado said that the company is not concerned with how fracked gas will be used when it leaves the U.S. border, writing:

The Trans-Pecos Pipeline was contracted by Mexico’s Federal Electricity Commission (CFE) to deliver natural gas from the Waha Hub outside Fort Stockton, Texas in northern Pecos County to the Texas-Mexico border, at which point they take ownership of the product. I cannot speak for CFE, but we are not aware of any discussions related to the gas leaving Mexico.”

Pemex did not respond to inquiries for this story.

Construction of the Trans-Pecos pipeline in the desert with mountains beyond
Critics of the Trans-Pecos pipeline through West Texas question whether Mexico’s natural gas needs warrant all of the border-crossing pipelines being built to serve it. Credit: Big Bend Conservation Alliance

Could Politics Affect Trans Pecos and Other Pipelines?

In his first week as president, Donald Trump soured relations with Mexico by demanding that the country pay for a border wall, potentially via a 20 percent tax on Mexican goods (which would include oil imported from Mexico), a threat the administration quickly walked back. This incident brings into question the fate of cross-border pipelines like TPP amid changing U.S.-Mexico relations.

While Trump’s actions led to Mexican President Enrique Peña Nieto canceling his meeting with the U.S. president last week, Trump has praised Mexican billionaire Carlos Slim as a “great guy.” Slim, the richest man in Mexico, heads Carso, part of TPP’s consortium. Slim has even snatched the diplomatic role from Peña Nieto, telling Mexicans not to fear Trump.

Bloomberg recently noted that imported gas from TPP and other U.S.-Mexico pipelines would lower Mexico’s power costs and eventually drive down the cost of some goods made in Mexico. That might increase pressure on U.S. companies to move production to Mexico, potentially undermining Trump’s campaign promises to keep more jobs in the U.S.

But Gregory Brew, a PhD candidate studying public policy and energy at Georgetown University, speculates if a trade war broke out between the U.S. and Mexico, the pipelines would likely be unaffected.

Both Trump and Carlos Slim have too much personally and financially at stake to let something like a border wall or trade war affect the flow of natural gas,” Brew told DeSmog.

Donald Trump owned up to $1 million worth of ETP stock at one point. Last week he signed executive memos that revived work on the Keystone XL and Dakota Access pipelines and promised to expedite reviews of similar projects.

Brew added that if the U.S. passes laws making it difficult or expensive for Mexico to import cheap, fracked gas, it would quickly ramp up production from its own vast resources.

By Larry Buhl

Main image: The Trans-Pecos pipeline is nearly complete but rising tensions between the U.S. and Mexico may complicate the flow of gas that may one day flow through it. Credit: Will Mederski

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