North American natural gas model: Impact of cross-border trade with Mexico

We find that, in order to reduce pipeline imports, Mexico depends on economic incentives that lower barriers to infrastructure investment and keep production costs at competitive levels. If reforms to guarantee these incentives are not successfully implemented, growing gas demand in Mexico will be satisfied by further supply from Texas and neighboring states. This will cause a ripple-effect of increasing production in other regions in the U.S. and a shift in trade flows across the continent.