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Millions In Northern Mexico Also Stuck With Cold-Related Power Outages

AILSA CHANG, HOST:

The U.S. has not been the only country experiencing blackouts these last few days. In Mexico, millions of people were left without electricity this week as a cold snap swept through the region. The crisis has brought Mexico's dependency for natural gas - gas from the U.S. and especially from Texas - into sharper view. NPR's Carrie Kahn joins us now from Mexico City.

Hey, Carrie.

CARRIE KHAN, BYLINE: Hi.

CHANG: So what is the situation right now? Are there still blackouts in Mexico?

KHAN: Yes, overnight temperatures are still near freezing in northern Mexico. And in the last 24 hours, there does continue to be blackouts. And they've spread into at least 26 states throughout the country. Electricity managers are trying to redistribute the energy. Mexico's grid is very centralized, not like in the U.S., where there's many grids. Here, it's just generally one, so we've seen rolling blackouts as far south as Quintana Roo, where Cancun is located, and here in neighborhoods in Mexico City. And business losses are projected in billions of dollars.

CHANG: Wow. OK, so what do we even know so far about why Mexico's power grid failed?

KHAN: I'll give you two statistics. I think they just paint the picture really clearly. Sixty percent of Mexico's electricity production comes from natural gas-fired plants. And 80% of that natural gas comes from the U.S., so it's clear Mexico is heavily dependent on natural gas from the U.S. So when the pipes froze in Texas, Mexico was quickly in big trouble. And that dependency is increasing too. And I spoke with Chris Lenton. He covers Latin American energy markets for the industry journal Natural Gas Intelligence. He says Mexico's national energy plan is to buy even more imported natural gas from the U.S.

CHRIS LENTON: So not only does the country right now rely on natural gas for a majority of its energy production, but it's also - its immediate plan under this administration is to build more natural gas-fired generation plants.

KHAN: And they haven't increased domestic production of natural gas to fuel those plants either.

CHANG: So what is the Mexican government saying now about how they're even going to resolve the electricity problem?

KHAN: That is tricky. Mexico has arranged some shipments of liquid natural gas by tankers into major ports here. That's a stopgap measure. And they're really just hoping the weather gets better fast in Texas, and the pipelines start flowing again. But this afternoon, Texas Governor Greg Abbott announced he was banning sales of natural gas to all out-of-state purchasers until the 21, and that's trouble for Mexico. Natural gas shortages was just something Mexico didn't foresee. And I talked to David Maravilla. He's a consultant with Horizon Client Access, a consultancy firm for companies in the energy sector. He said, you know, natural gas from the U.S. was and usually is really cheap. No one imagined the flow would stop. This catastrophic weather event, you know, wasn't contemplated in Texas or in Mexico either.

DAVID MARAVILLA: People will never think that for some reason, there will be a major disruption of gas coming from the states. And, of course, that's something that the country should address. But the Lopez Obrador administration doesn't have any program, doesn't have any policy, any plan in place to address this.

KHAN: Look; President Lopez Obrador is a nationalist, and that's nowhere clearer than in his national energy program. He's put the state-run electricity company and the state oil company first in all his plans, spending billions of dollars to make them profitable. But they're anything but, and they're rife with corruption. Lopez Obrador says Mexico has to be energy sufficient. And this crisis, which really highlights Mexico dependence on the U.S. for natural gas, has given him more fodder for that policy. The thing is his energy plan as written doesn't increase natural gas production at all and just focuses on the state industry. And so it doesn't really provide any short-term solutions and puts into question long-term solutions for crises like we're seeing now.

CHANG: That is NPR's Carrie Kahn in Mexico City.

Thank you, Carrie.

KHAN: You're welcome. Transcript provided by NPR, Copyright NPR.

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