The overhaul of Mexico’s energy sector could have benefits north of the border too.
Businesses in the Rio Grande Valley are projecting a surge of economic activity as Mexican oil, gas and power operations open to private investment after seven decades of state-owned monopoly. Some even hope that an improved economy in Northern Mexico could reduce the influence of the violent drug cartels that have terrorized border regions especially.
Texas’ Rio Grande Valley has missed out on most of the benefit from the nearby Eagle Ford Shale, which is booming with oil and gas activity brought on by technical advances that make production profitable from once-inaccessible reservoirs.
Mexico and South Texas could enjoy a similar boom if, as the U.S. Energy Department projects, outside investment and expertise boost Mexico’s oil production by as much as 75 percent.
A study by BBVA Compass found that economic activity in Mexico tied to the energy reforms could add 217,000 jobs, almost $3.5 billion in state revenue and $45 billion in gross domestic product to the Texas economy.
Others, however, warn against setting expectations too high this early in the Mexican overhaul, which just began this year.
Energy writer Robert Grattan visited Edinburg, 20 miles from the border, for a report on HoustonChronicle.com and in Sunday’s print editions of the Houston Chronicle.
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