McALLEN, RGV – Rio Grande Valley economic development leaders did not really get involved with the development of the Eagle Ford Shale play because it was deemed too far removed from the region.

That is not the case with the Cuenca de Burgos in northern Mexico, which is thought to be many times bigger than Eagle Ford.

Today, a new regional consortium is to be unveiled in McAllen today that will focus on how northern Mexico and South Texas can make the most out of oil shale development in the Burgos Basin.

“We are creating a consortium of communities, non-profits and economic development corporations that are interested in a collaborative effort to see how our region can take advantage of what is going to happen just south of Reynosa,” said Steve Ahlenius, president of the McAllen Chamber of Commerce.

The group is being titled the Burgos Shale Consortium and the announcement will be held at the McAllen Chamber of Commerce offices at 10 a.m.

McAllen Chamber of Commerce President Steve Ahlenius.
McAllen Chamber of Commerce President Steve Ahlenius.

Ahlenius said Mexico is a key player in the Consortium. “Several key players from Tamaulipas will be at the announcement,” he said. Ahlenius listed four key goals for the consortium:

*Information and economic impact studies

*Workforce Development

*Business Development and Expansion

* Enhance economic ties between S. Texas and N. Mexico and expansion for Tamaulipas

Ahlenius said two key drivers have positioned South Texas to take advantage of the Burgos Oil Shale play. One is that drilling and recovery technology has now enabled oil companies to recover oil and oil byproducts that just ten years ago were not recoverable; and two, the sweeping energy reform in Mexico that now allows multinational oil producers to invest in Mexico.

“The region is now in a position, because of the location of the Burgos field and staging, to play a major role in energy and energy related businesses. In addition, we are positioned to attract major international companies that require cost effectiveness and energy abundance for their production,” Ahlenius said.

The McAllen Chamber leader said two key events will happen for the Consortium in the next four months, Firstly, the Consortium will fund an economic impact study of the impact and potential of the oil play. And secondly, a Burgos Oil Shale Consortium Conference will be held in late March of 2015 in McAllen.

Ahlenius said the cost of joining the Consortium will be $500 per entity.

Tamaulipas Governor Egidio Torre Cantú recently hosted a discussion on the potential impact of Mexico’s energy reforms on his state. The event was held at La Fogata in Reynosa and several Valley leaders were present, including state Sen. Juan Hinojosa, state Rep. Sergio Muñoz and McAllen Mayor Jim Darling.

Torre Cantú showed a power point presentation that was based on a report on energy development his office released earlier this year.

“Mexico is part of the dynamic energy transformation field. The economic activities related to the energy sector contribute 12.3 percent of the national GDP. These include from oil extraction, refining, transmission and distribution of electrical energy to making derivatives in petrochemical industry. In Tamaulipas, these activities contribute 20.5 percent of the state GDP,” Torre Cantú said.

Torre Cantú said Mexico’s Energy Sector Program for 2013-2018 defines six goals for energy development:

1) Optimize production capacity and processing hydrocarbons, ensuring efficient and competitive processes.

2) Optimize the operation and expansion of national power infrastructure.

3) Develop the transport infrastructure that will strengthen the security of energy supply, contributing to economic growth.

4) Increase coverage of fuel and electricity users in different areas.

5) Expand the use of clean and renewable energy, promoting energy efficiency and social and environmental responsibility.

6) Strengthen operational security, advocacy, knowledge, training, financing and suppliers in the various national energy industries.

“The energy reform should bring more domestic and foreign investment in the country. There will be more participants in the energy market,” Torre Cantú said, in Spanish. Businesses, small and medium sized companies, will enjoy more energy at a lesser cost. In the agricultural sector, is expected to produce more and better fertilizers. Additionally, environmental care will improve with the adoption of more clean energy.”

Torre Cantú went on to say that while Mexico begins a new energy future, “Tamaulipas is prepared for this transformational change.” He said the state will “work to seize this historic moment and capitalize on economic growth and development.”

According to the Governor’s Office, production of natural gas in Tamaulipas in 2013 was 825.32 million cubic feet per day, with an average annual growth rate of 7.22 percent.

Torre Cantú said energy production in the state is divided into two major sectors: oil production and conventional power generation, managed by Petroleos Mexicanos (Pemex) and the Comision Federal de Electricidad, (CFE) respectively.

“In 2012, Tamaulipas was the second largest producer of electricity nationwide with a generation of 32.958 Gigawatt hours annually, accounting for 12.6 percent of national generation,” Torre Cantú said. “In 2013, according to data recorded in the Energy Information System, it generated 33.558 gigawatts, confirming us as the second national producer of electricity.”

In 2013, Tamaulipas used 26 percent of its total electricity production. The rest of the energy as added to the national grid to meet the demand of others, Torre Cantú said.

Total employment in Tamaulipas reached 1,616,000 people, with an occupancy rate of 94.2 percent, in the fourth quarter of 2013, Torre Cantú said. Of the total employment, 78,820 people are employed in energy-related activities. One in 20 workers in Tamaulipas contributes to the energy sector, the governor noted.