Trump Risks America's Biggest Energy Customer

Donald Trump's promised wall on the U.S.-Mexico border will need some gaping holes for natural-gas pipelines if Trump is also to keep his promises to grow the fossil-fuel industries and export more energy.
"As for President-elect Trump’s stated goal of making the United States a net energy exporter, this trend is already solidly evident," said Alan Krupnick, co-director of Resources for the Future's Center for Energy and Climate Economics, in an assessment released Thursday of energy policy under a Trump Administration.
"If trade subsides with Mexico over issues with immigration and NAFTA, US natural gas and pipeline suppliers will be hurt," Krupnick writes.
As Krupnick was dotting the Is and crossing the Ts on his policy brief, the U.S. Energy Information Agency was preparing two reports on the growth of U.S. natural gas exports to Mexico, which has rapidly become the nation's biggest customer.
"U.S. pipeline exports of natural gas continued to grow in 2016, and they have doubled since 2009. Almost all of this growth is attributable to increasing exports to Mexico, which have accounted for more than half of all U.S. natural gas exports since April 2015," the EIA reported on Nov. 29.
The U.S. is sending 4.2 billion cubic feet per day (Bcf/d) of natural gas—much of it shale gas from fracked wells in Texas—to Mexico via newly-built pipelines that can carry much more. Existing pipelines have a capacity of 7.2 Bcf/d, and new pipelines are expected to double that number in the next three years.
A corresponding network of pipelines is growing in Mexico to hasten delivery of all that North-American gas to more regions of Mexico.
But Trump could impede this development if his policies on trade and immigration sour relations with Mexico, which has suddenly become the biggest importer of U.S. energy.
"Needless to say, it is in the US interest for Mexican economic growth to increase," Krupnick writes, "and US natural gas is playing and will continue to play a major role in helping this growth along. Avoiding these and other perverse effects of otherwise priority administration policies will not be easy."
The governor of Mexico's state of Nuevo León characterized what Mexico's response may be:
"The U.S. is not the world,” Jaime Rodríguez said after the U.S. air conditioner manufacturer Carrier reduced its relocation to his state. “We have a very strong relationship with the US, but we don’t depend on them. They should depend on us.”