FERC authorizes expansion of US-Mexico pipeline
- The Federal Energy Regulatory Commission (FERC) has approved the expansion of a Kinder Morgan pipeline exporting natural gas to Mexico, saying the project "will promote national economic policy."
- Sierrita Gas Pipeline runs 61 miles, from a point on the El Paso Natural Gas pipeline system, near Tucson, Arizona, to the United States-Mexico border near Sasabe, Arizona. The expansion capacity will help supply a power plant in northern Mexico.
- Along with reducing regulatory burdens and saving the coal industry, President Donald Trump has promoted "dominance" as part of his administration's energy strategy. According to the U.S. Department of Energy, the country will be a net exporter of energy beginning in 2022.
The United States is growing its energy trade, including natural gas, coal, oil and other fuels, and is on the cusp of having exports exceed imports for the first time since 1953. Despite being locked in a trade war with China, the United States is growing its energy exports to that country, which will play a significant role in shifting the energy trade balance.
Kinder Morgan's Sierrita pipeline plays a tiny role in all this, but the project's approval is reflective of the broad shifts: Energy efficiency is tamping down demand from U.S. consumers, while growing production has some fuel markets in a glut.
Currently, the Sierrita line moves up to 200,846 dekatherms (Dth) per day into markets in northwest Mexico. After the expansion, the system will move almost 323,000 Dth/d.
"Authorization of the proposed amendment will promote national economic policy by reducing barriers to foreign trade and stimulating the flow of goods and services between the United States and Mexico," FERC noted in its order.
The project calls for construction of a new compressor station in Arizona, estimated to cost about $56 million. The order includes some construction mitigation measures the company must take, but regulators said the project "would not constitute a major federal action significantly affecting the quality of the human environment."
Kinder Morgan's Sierrita pipeline interconnects with an existing gas pipeline in Mexico owned by IENova and "provides transportation service to growing markets in northwest Mexico," according to the company.
Natural gas use is growing the United States, at times creating competition between generators and customers for the same supply. While renewables are growing, the U.S. Energy Information Administration (EIA) believes gas "will remain the primary source of U.S. electricity generation for at least the next two years."
Natural gas plants currently supply about a third of the country's generation, followed by coal and nuclear, according to EIA.
- Federal Energy Regulatory Commission Order
Follow Robert Walton on Twitter