Law and economics challenges of natural gas—the hard case of Mexico

Law and economics challenges of natural gas—the hard case of Mexico 3240 2160 Eduardo Díaz Medina

Autores: Rafael Garduño Rivera y Miguel Marmolejo Cervantes

ABSTRACT:

This article addresses the risks and uncertainties for Mexico derived from the excessive dependency on US natural gas. It will take as a reference Btu price fluctuation and the covenants contained on the based contract for sale and purchase of natural gas, particularly in the context of the behaviour displayed by market participants (including governments) during the recent winter storm energy crisis in Texas which consequently forced shortages in Mexico due to a lack of ‘available’ natural gas to produce power (electricity). The research question includes: Should Mexico exploit its vast natural gas resources although it might not be a sustainable or a cost-effective (economically–socially and environmentally) decision? (The curse of the TEX-MEX-NG). Or instead, would it be better to prepare (within the limits of its financial situation) to address the US natural gas price fluctuations, like price hedging? Or a combination of both?

Liga para el artículo:

https://academic.oup.com/jwelb/article-abstract/14/3/205/6297851?redirectedFrom=fulltext

Autores UP: Rafael Garduño Rivera
Escuela de Ciencias Económicas y Empresariales