A bipartisan group of Texas lawmakers is seeking to strengthen the ties of the U.S. energy sector to Mexico even as the political battle over the border wall partially shut down the federal government.
U.S. Rep. Henry Cuellar, D-Laredo, has filed House Resolution 132, which seeks to boost U.S. funding for the North American Development Bank, or NADBank, and give the binational financial institution authority to fund cross-border natural gas pipelines and natural gas-fired power plants.
Created shortly after the North American Free Trade Agreement took effect in 1994, NADBank is jointly funded by the United States and Mexico to finance public works such as water, sewer and transportation systems. Given the level of oil and natural gas development taking place in the Eagle Ford Shale of South Texas and Permian Basin of West Texas, Cuellar contends that adding natural gas projects to the bank’s portfolio is logical.
“As Texas continues to be a world leader in natural gas production, it is imperative that we find ways to meet surging global demand,” Cuellar said in a statement. “The North American Development Bank has been a cost-effective investment for American taxpayers and has helped fund various environmental and water infrastructure projects on our southern border.
Cuellar has found allies among three border congressmen who are co-sponsoring the bill: Rep. Will Hurd, R-Helotes; Rep. Filemon Vela, D-Brownsville; and Rep. Vicente Gonzalez, D-Edinburg. Hurd, whose district stretches from San Antonio to the suburbs of El Paso and includes hundreds of miles along the border, explained that NADBank has already financed numerous projects in his district, but adding natural gas would support further development.
Supply and demand
“NADBank has a proven record of stimulating local economies by bringing together public and private entities and funding projects,” Hurd said in a statement. “With the current energy boom in West Texas, NADBank has an unprecedented opportunity to leverage their experience in a thriving sector that will result allow investments to have a tremendous impact across the 23rd District of Texas.”
Headquartered in San Antonio, NADBank has provided $2.42 billion in loans and grants over the last 24 years for 167 projects, including wind and solar energy developments. Most of the solar and wind projects generate electricity for customers on their respective sides of the border, but that is changing.
In 2014, for example, NADBank agreed to provide a $39.1 million loan for the Energía Sierra Juarez Wind Farm in Baja California, which supplies electricity to San Diego Gas & Electric on the American side of the border.
At the same time, Mexico’s appetite for natural gas has grown significantly over the past few years as it switches its power plants from coal and oil to cleaner-burning natural gas. Facing sagging domestic production, Mexico has turned to United States, where shale drilling has produced record volumes of natural gas. U.S. natural gas exports to Mexico have more than tripled since 2012 with customers south of the border now importing more than 6 billion cubic feet of natural gas per day, according to the U.S. Energy Department.
Over the past few years, Mexico’s Federal Electricity Commission issued a number of contracts that have boosted the number of cross-border natural gas pipelines to feed power plants. Operators such as Kinder Morgan, Enbridge, NET Midstream and Howard Energy Partners have all built natural gas pipelines to destinations in Mexico. Cuellar believes that giving NADBank the authority to fund natural gas projects will further strengthen those cross-border business ties.
“These projects will continue to boost cross-border energy distribution and energy security between the United States and Mexico,” Cuellar said.