The global natural gas revolution has arrived in Mexico. As the country’s power sector undertakes a fuel shift toward natural gas, state-owned and domestic companies are beginning to seek ways to partner with technology-empowered foreign firms to boost domestic production.

While maintaining and expanding struggling crude oil production at state-owned Petroleos Mexicanos (better known as Pemex) has been a priority for successive Mexican governments, and is part of the logic behind the constitutional changes proposed by the current government of Enrique Pena Nieto, the transformation of the Mexican electric power sector underway may be the more notable change, Steptoe & Johnson lawyer and former Federal Energy Regulatory Commissioner Marc Spitzer told Breaking Energy.

Read more about the proposed constitutional changes on Breaking Energy here. 

Mexican state electricity giant CFE has already been directed to retrofit its many power plants burning oil to natural gas, Spitzer said. “The arguments for moving off oil are just too compelling,” he said, noting both the environmental benefits of less carbon-intensive natural gas as a fuel as well as its comparative cheapness following the production boom in shale gas across the US.

There are environmental concerns in Mexico about bringing hydraulic fracturing to the country, but Spitzer expects there to be less opposition to expansions of the already-growing use of US natural gas moved by pipeline. The mix of environmental concerns with a long-standing history of resistance to US economic power in the country could lead to a political situation where Mexican-owned oil production is sold for foreign currency that in turn pays for US-produced natural gas to power the retrofitted power plants, but over the long term Spitzer expects US firms to be allowed to partner with Mexican companies to access and drill local reserves.

“Politicians regularly take untenable positions for political reasons,” he said, and foreign firms seeking to do business in the Mexican oil or natural gas sectors following the proposed constitutional reforms will need to be sensitive to Mexican political realities. “There will be fits and starts” to development of the Mexican natural gas sector, but “Mexico wants to get the benefits of the natural gas revolution.”