Should Mexico Exploit Its Eagle Ford Riches?

The Eagle Ford is essentially a sedimentary rock formation that consists of rich, organic fossiliferous marine shale. The formation extends towards northern Mexico and is known to have an average thickness of about two hundred meters. TOC or total organic content is believed to average five percent.

This shale formation can be a game changer for the economy of Mexico. In fact, the portion of the eagle ford Nuevo Leon and eagle ford Coahuila formations can contain more than ten percent of world's recoverable shale oil reserves. Keeping this in mind, Mexico's government recently passed reforms liberalizing the country's monopoly laws that prevented private companies from exploiting oil reserves, and left Mexico's gas and oil recovery, exploration, and sale to Pemex (a government body). Unfortunately, Pemex does not have the capacity to cope with newer technologies such as hydraulic fracking.

The effect on economy:

Mexico has huge untapped shale gas and oil deposits and is estimated to hold the potential to have a drastic economic impact. The effect of eagle ford Nuevo Leon and eagle ford Coahuila shale formation on the economy of Mexico can be similar to shale’s impact on the Texas economy, including more than thousands of new jobs, sixty billion in economic development, and a couple of 2 billion as government revenue.

A lot of experts believe that the country is unlikely to tap into the Eagle Ford, because it lacks expertise, pipeline infrastructure, and because Pemex has always been more interested in investing in the oil deposits that gave higher returns. The exploitation of the resources will certainly be a major economic generator for the poor northern Mexico, also helping to suppress the criminal cartels and decreasing unlawful migration. Meanwhile, tapping in the resources will also prove to be a big boon for other gas and oil importing nations as they will have to depend less on the gulf countries for energy resources. This will certainly help reduce the monopoly of certain nations over necessary resources.